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| CONTENTS |
VolUME 4, no 4 • MAY 2018
58
COVER STORY Colorado-based incredibles infuses the professionalism of the food industry into every edible, concentrate, wellness product, and extractor it produces.
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38
34
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14 | HARVEST
42 | SPOTLIGHT: Design
News and information from around the nation.
Toronto-based Seven Point Interiors has more than thirty years of combined experience under its designer belt.
34 | TOP SHELF Oregon City’s Gnome Grown weaves farmto-label ethics into its modern, craft-inspired design.
38 | TIP JAR Five essential skills that help make a good budtender.
50
44 | SPOTLIGHT: Horticulture At Colorado-based AlpinStash, practitioners of whole-plant love hope horticulture will heal the world.
46 | SPOTLIGHT: Payment Processing The LINX debit card offers an easy and inexpensive new way to pay for weed.
40 | SPOTLIGHT: Branding
50 | CORNER OFFICE
Madison 8’s diverse staff develops brand concepts that resonate with targeted consumers.
Korova CEO Steve Adkins on how the company’s preparedness for adult use gave it a leg up over the competition.
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| CONTENTS |
VolUME 4, no 4 • MAY 2018
70
FEATURE STORY Three experts examine the state of marketing and branding in the cannabis industry, and reveal what they intend to do about it.
56 | EXECUTIVE PROFILE Rob Ribeiro of Los Angeles’s Fountain of Wellbeing is committed to patients, detail, and professionalism.
88 | LEGAL A few important things to consider before naming your cannabis strain.
92 | FEATURE Creating an inclusive environment for marginalized groups requires sensitivity and education.
104 | HORTICULTURE The answers to five common questions about growing cannabis in a greenhouse.
106| MARKETPACE INTELLIGENCE A graphic look at margins, growth trends, and monthly sales.
110| PRODUCTS Things that cut, grind, chop, vape, smoke, grow, and taste really, really good.
118 | HASHTAG 120 | OPINION Lance Lambert, strategic business unit manager for Boveda, recommends…
Photo by Erik Hecht, Medicinal Light & Magic
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| LETTER FROM THE EDITOR | For the Cannabis Professional
EDITOR IN CHIEF: Tom Hymes EXECUTIVE EDITOR: Rob Hill CREATIVE DIRECTOR: Angela Derasmo CONTACT: editorial@cannmg.com CONTRIBUTING EDITORS Adrian Sedlin, Alec Rochford, Dr. Allen S. Miller, Anastasia Ashley Picillo, Kaufman, Benjamin Hoopes, Cameron Martel, Christopher Machnich, Danny Davis, Danny Reed, David Hodes, Dawn Stancarone, Dr. Donald Land, Jefferson Reid, John Rozelle, Kate Cook, Kenneth J. Berke, Kymron Decesare, Leah Maurer, Leslie Bocskor, Lukian Kobzeff, Luke K. Stanton, Mary Shapiro, Joanne Cachapero, Matthew Rosen, Matthew Youngblood, Megan Stone, Michael Chernis Esq., Nancy Gudekunst , Nancy A. Shenker, Neil Juneja, Nigel Williams, Paul Kiernan, Richard D. Pio Roda Robert T. Hoban Esq., Sahar Ayinehsazian, Sam Fensterstock
Don’t Blame the Cannabis PEOPLE PURSUING BUSINESS DEALS in the cannabis industry sometimes are surprised to find their ensuing experiences do not always resemble the love-fest they had imagined. Not their fault. Old canards die hard. But what can be a true shock to the system is when the experience feels more like being garroted by a gang of cutthroats. Again, stereotypes die hard, but being ripped off in pursuit of saving the planet tends to change one’s perspective real fast, which is why it is extremely important people memorize the following sentence: Do not blame the cannabis. I’ve never done this before, but will everyone please repeat the sentence ten—no, okay, five—times? The mantra will keep you sane. I’ve interviewed many cannabis people over the past few years, in every vertical and at every level of success, compliance, and licensure, and what many of them have shared after we get past the “marketing” part of our talk is a deep concern about misinformation proliferating in the industry and the people who benefit from its dissemination. Their concerns are not simply passive but have led, and will continue to lead, to singular and concerted efforts to enforce standards. But it remains a minefield out there. Is ours worse than other industries? Of course not, but this one is new, supposedly fat with cash, and attracting everyone. So, please don’t let those old stereotypes turn your head, or one day you may wake up to discover your biggest mistake was mistaking the people for the plant.
Tom Hymes Tom@cannmg.com
OUR DO NO HARM MANTRA IS THE CORE OF OUR BUSINESS VALUES. WE ALL SHARE THE COMMON GOAL OF WORKING SMARTER TO REDUCE OUR CARBON FOOTPRINT WITH SUPPLIERS, CUSTOMERS AND EMPLOYEES DRAMATICALLY REDUCING WASTE TO LANDFILL, SIGNIFICANTLY CUTTING PAPER AND MATERIAL USAGE COMPLYING WITH ENVIRONMENTAL STANDARDS AND PROGRAMS THAT HELPS US ACHIEVE THIS MISSION. WE ONLY USE RECYCLED PAPERS AND SOY BASED INKS ON OUR PRINTED PRODUCTS WHENEVER POSSIBLE.
mg is printed in the USA and all rights are reserved. ©2018 by CANN Media Group, LLC. mg considers its sources reliable and verifies as much data as possible, although reporting inaccuracies can occur; consequently, readers using this information do so at their own risk. Each business opportunity and/ or investment inherently contains criteria understanding that the publisher is not rendering legal or financial advise. Neither CANN Media Group, LLC. nor their employees accept any responsibility whatsoever for their activities. All letters sent to mg magazine will be treated as unconditionally assigned for publication, copyright purposes and use in any publication or brochure and are subject to mg unrestricted right to edit and comment.
ADVERTISING & MARKETING SALES DEPARTMENT: Brie Ann Gould: Brie@cannmg.com Joe Sebergandio: Joe@cannmg.com Meghan Cashel: Meghan@cannmg.com General Inquiries: Sales@cannmg.com PHOTOGRAPHY COVER PHOTO: Thomas O’Brien COVER CONCEPT: Stephanie Smith CONTRIBUTING PHOTOGRAPHERS: Erik Hecht, Mike Rosati, Kristen Angelo, Simeon Schatz, Thomas O’Brien, Jamie Soja, Michael Snyder, Lukas Zanoli CONTRIBUTING ARTISTS Christine Pervarnik, Gavin Antil, Ryan Caradang, Zack Korn DATA MANAGEMENT DATA MANAGER: Kevin Guardado ONLINE DEPARTMENT BRAND MANAGER: Linda Friedman WEB DEVELOPMENT: Chris Fulton VIDEO PRODUCTION: Jorge Fuentes BUSINESS OFFICES CHIEF EXECUTIVE OFFICER: Darren B. Roberts DIRECTOR OF CONTENT : Kathee Brewer DIRECTOR OF OPERATIONS: Erin Zavala CREATIVE STRATEGIST: Gavin Antill GENERAL INFORMATION: Hello@cannmg.com MAILING ADDRESS CANN Media Group, LLC 21333 Oxnard Street, Second Floor Woodland Hills, CA 91367 (310) 421-1860 www.mgretailer.com A CANN Media Group Publication
mg: For The Cannabis Professional Vol. 4, No. 4, (ISSN 2379-1659) is published monthly and is available to qualified industry professionals by readership request or is also available for purchase online [subscribe.mgretailer.com] Application to mail at Periodicals Pending postage rate is pending at Canoga Park, CA. and at additional mailing offices. POSTMASTER: Send all UAA to CFS. NON-POSTAL AND MILITARY FACILITIES: send address corrections to: mg: For The Cannabis Professional, 21333 Oxnard Street, Woodland Hills, CA 91367.
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Harvest All the news that’s fit to smoke.
• MCCONNELL SEEKS HEMP LEGALIZATION • CANNABIS MAY REDUCE OPIOID USE • BIGMIKE SEEKS NEXT MJ MILLIONAIRE • CALIFORNIA MAY LOWER REC TAXES
Judge Rescinds All Arkansas Cannabis Licenses LITTLE ROCK, Ark. — In an 11th-hour decision, an Arkansas judge declared all cannabis cultivation licenses issued by the state “null and void,” ruling the selection process appeared biased and regulators failed to follow their own rules and state law. After the Arkansas Medical Marijuana Commission awarded five cultivation licenses, a group of unsuccessful applicants sued, saying one planned grow would be too near a school, daycare center, or church. The plaintiffs also alleged the commission failed to investigate whether any of the new licensees were delinquent on franchise taxes for other businesses they own. (At least one allegedly was, according to court documents). In addition, plaintiffs accused the commission of awarding licenses to individuals
with whom commissioners had business or personal relationships. In his ruling, Circuit Judge Wendell Griffin minced no words. “To put it bluntly, the Medical Marijuana Commission and Alcoholic Beverage Control Division have proceeded in a manner that defies due process and the rule of law, rather than in a manner that respects it,” he wrote. The commission’s actions “created the appearance of bias…” He also faulted the commission for failing to seek public input before awarding the licenses and declining to hear appeals from the unsuccessful applicants afterward. The state has said it accepts the judge’s ruling but has not revealed how it will proceed.
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| NEWS |
Omnibus Spending Bill Protects Cannabis from Jeff Sessions
WASHINGTON, D.C. — The federal budget that funds the U.S. government for the remainder of fiscal year 2018 also prevents the Department of Justice from pursuing Attorney General Jeff Sessions’ anti-cannabis agenda. After threatening a last-minute veto for unrelated reasons, President Donald Trump signed the omnibus budget bill into law March 23. A provision called the Leahy amendment (formerly Rohrabacher-Blumenauer and Rohrabacher-Farr) prohibits the DOJ from using tax dollars to interfere with state-legal medical cannabis patients and businesses. According to Section 538, “None of the funds made available under this act…may be used with respect to any of the states… to prevent any of them from implementing their own laws that authorize the use, distribution, possession, or cultivation of medical marijuana.” The section lists 46 states, the District of Columbia, Guam, and Puerto Rico. The amendment omits Idaho, Kansas, Nebraska, and South Dakota, all of which enforce federal prohibition. The amendment protects only medical cannabis, not adult use. A bipartisan group of 62 House members already is working on a fiscal year 2019 budget provision to guarantee freedom from federal interference in the medical cannabis space. Given Sessions’s rescission of the Obama-era Cole Memo in January, some members of Congress want to codify protections for both medical and recreational commerce and use. The Leahy amendment also shields state industrial hemp research programs.
Dispensary Bans Patients for Negative Reviews CUMBERLAND, Md. — A Maryland dispensary that banned four patients after they left negative comments online has ignited a debate about ethics: Should dispensaries be allowed to control patients by withholding medicine? Sajal Roy, owner of Allegany Medical Marijuana Dispensary, admitted to The Washington Post he banned four patients because they complained on Facebook about prices and service. He reversed his decision in two cases after the patients agreed to delete their posts and publicly apologize. The other two remained banned as of March 22. Allegany is one of only two dispensaries in its region of western Maryland. The other is 90 miles away, presenting a hardship many patients can’t overcome. The Maryland Medical Cannabis Commission is investigating whether Roy’s action violated state law.
30 grams
Personal possession limit per Canadian of legal age. (Source: Health Canada)
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BIG MIKE
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BRIAN S.
Legal Cannabis Could Create 1 Million Jobs by 2025 WASHINGTON, D.C. — Federal cannabis legalization could create 654,000 jobs in the immediate future and one million jobs by 2025, according to New Frontier Data. The data analysis firm also predicted legalization would pull in $105.6 billion in revenue by 2025. If Pueblo County, Colorado, is any indication, that figure could be low. According to researchers at Colorado State University-Pueblo, cannabis taxes and fees added more than $58 million to the county’s coffers in 2016 alone. After subtracting enforcement and administrative costs, the county ended up with a net profit of $35 million. The CSU-P researchers predicted a net positive impact of $100 million per year by 2021.
HHS Secretary: ‘There is no Such Thing as Medical Marijuana’ WASHINGTON, D.C. — U.S. Health and Human Services Secretary Alex Azar needs a reality check. Speaking about the opioid epidemic in mid-March, he told assembled media, “There really is no such thing as medical marijuana. “There is no FDA approved use of marijuana, a botanical plant,” he added. “I just want to be very clear about that.” No one can expect Azar to be unbiased. A former president of pharmaceutical giant Eli Lily and Company, he also served on the board of directors for the Biotechnology Innovation Organization, a pharmaceutical lobby. He resigned both positions in January 2017; in January 2018, he was sworn in as HHS Secretary. According to Azar, President Trump and Congress plan to fund a $13 billion “opioid and mental health program.” In 2019 alone, more than $750 million will be earmarked for a National Institutes of Health-led public-private partnership devoted to developing nonopioid painkillers. None of the research will focus on cannabis, despite several previous NIHfunded studies suggesting cannabis may be an effective treatment for intractable pain. Prior to Lily, Azar, an attorney, worked for the 2000 Bush-Cheney presidential campaign before serving as HHS general counsel, then deputy secretary of the department. He also clerked for arch-conservative Supreme Court Justice Antonin Scalia after graduating from Yale Law School in 1991. A Republican, he has donated to the political campaigns of candidates including Vice President Mike Pence, Senate Majority Leader Mitch McConnell, Utah Senator Orrin Hatch, Tennessee Senator Lamar Alexander, Florida Senator Jeb Bush, and President Donald Trump.
28% Colorado state sales tax on adult-use product.
(Source: Colorado Department of Revenue)
Socially Engaged
@macdizzle420
127K
@dankdalia
222K
18 17% Legal age to purchase cannabis in Canada.
(Source: Health Canada)
Oregon state sales tax on adult-use product.
(Source: Oregon Department of Taxation)
@natediaz209
2M
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HARVEST: News
Politician’s Pot Policies Spark Death Threat VIRGINIA BEACH, Va. — The national debate about gun violence intersected with the debate about legalizing cannabis in late March when a Virginia man allegedly threatened to kill a pro-pot congressman and his staff. According to police reports, Wallace Godwin, 69, took his anti-weed stance to extremes when he walked into Representative Scott Taylor’s Virginia Beach office and threatened to shoot Taylor and two staff members with a shotgun. Godwin, who has a concealed weapons permit, was unarmed at the time. “Scott is having an event this Saturday,” Godwin allegedly told the congressman’s staff during an animated discussion about Taylor’s vow to decriminalize marijuana at the federal level. “I am going to get my shotgun and do something about this. I will just handle this myself.” He then pointed at two staffers and said, “You two are next,” according to the arrest report. “I think everybody needs to calm down [about hot-button issues],” Taylor, a Republican, said. “We just need to calm down and realize we’re not going to agree on every single issue.” Godwin faces a maximum of ten years in prison if convicted on charges of threatening to assault and murder a United States official.
European Doctors Call for Mainstreaming Medical Cannabis BEERSHEBA, Israel — A special issue of the European Journal of Internal Medicine (EJIM) takes an extensive look at medical cannabis, ultimately concluding the healthcare community’s goal “should be to scientifically establish the actual place of medical cannabis-derived products in the modern medical arsenal.” “Despite hundreds of years of experience with cannabis going back to the dawn of humanity, the evidence on the safety and efficacy of medical cannabis remains scarce,” Victor Novak, a professor at Ben-Gurion University of the Negev in Israel, wrote in the issue’s introduction. “Meticulously conducted observational studies and clinical trials started to appear in medical literature only recently, yet our patients frequently approach us with the question whether their medical condition can be treated with cannabis. “We feel it is absolutely imperative to not only present the current state of affairs, but also propose the development of the scientific research programs within the paradigm of evidencebased medicine,” he added.
Increasing Data Suggests Cannabis Can Reduce Opioid Use, Deaths ST. PAUL, Minn. — A new study by the Minnesota Department of Health adds to a growing body of academic research indicating cannabis may be an effective replacement for opioids used for pain control. Of the 2,000 chronic pain sufferers surveyed by the department, 63 percent were able to reduce or curtail their opioid use by substituting medical cannabis.
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HARVEST: Business
Projected Annual Consumer Spending on cannabis by 2027
$47.3 billion in the U.S., up from $9.2 billion in 2017
$1.2 billion
in Australia, up from a projected $52 million in 2018
$776 million in South America, up from a projected $125 million in 2018 (Source: Arcview Market Research)
40%
of edibles market was claimed by candy (not including chocolate) during 2017. (Source: BDS Analytics)
Brazil, Argentina, Uruguay, and Peru lead the South American cannabis market. (Arcview Market Research)
Greenlane Acquires Rival VaporNation BOCA RATON, Fla. — Greenlane (formerly VapeWorld) has acquired one-time competitor VaporNation, a distributor and online retailer of vaporizers. The acquisition expanded Greenlane into an eight-city operation with six automated distribution centers and a staff of 200. Greenlane will continue to operate VaporNation’s retail site, VaporNation.com, while absorbing the latter’s wholesale operations into its own. VaporNation’s previous owners will provide Greenlane with consulting services. Financial details of the transaction between the privately held companies were not disclosed. Greenlane serves approximately 9,000 independent retailers as the exclusive distributor of premium brands including Storz & Bickel, G Pen, PAX, DaVinci, Dr. Dabber, Marley Natural, Double Barrel, LEVO, Eyce, and Pollen Gear. Founded in 2005, the company claims to be the world’s largest distributor of vaporizers. GNLN.COM
Isodiol International Acquires Kure Corp.
VANCOUVER, B.C. — Isodiol International Inc., a Canadian manufacturer of bioactive CBD products, acquired Kure Corp., a specialty vape retailer headquartered in Charlotte, North Carolina, for an undisclosed sum. Kure operates twelve Kure Vaporium & Lounge locations in the United States, with plans for international expansion. The e-juice bars and lounges reported annualized unaudited fiscal 2018 revenue of $8.8 million from more than 200,000 customer transactions. ISODIOL.COM
23.77 million
packages of edibles sold in California, Colorado, and Oregon, combined, during second half of 2017 (Source: BDS Analytics)
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WHOLESALE ORDERS CALL 877.292.7660 | GNLN.COM NOT FOR SALE TO MINORS
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HARVEST: Business
True Leaf Breaks Ground on New Production Facility LUMBY, B.C. — True Leaf Medicine International Ltd. has begun construction of a new, forty-acre corporate hub that will include a 16,000-square-foot cultivation facility and an additional 9,000 square feet for laboratory services, whole-plant extraction, and production of therapeutic products. The project is expected to employ approximately 150 workers during construction and create 35 full- and part-time jobs when operations begin. True Leaf seeks to become a major employer in Lumby, a hard-hit logging community of 1,700 in the northeast corner of the Okanagan Valley. True Leaf Campus is expected to be completed and operational by Fall 2018. TRUELEAF.COM
California, Canadian Companies Shake Hands Across the Border
LOS ANGELES — A cross-border joint venture between American and Canadian companies could bring one of California’s most recognized cannabis brands to Canadian consumers by year’s end. MM Enterprises USA LLC, more commonly known as MedMen, operates dispensaries in California, Nevada, and New York. Cronos Group Inc., the first pureplay cannabis company traded on the Nasdaq, is a licensed producer and distributor of medical cannabis in Canada, with additional footprints in Germany, Israel, and Australia. Together, the two companies have formed MedMen Canada Inc. to develop branded products and open stores across Canada. The joint venture will be a 50/50 partnership and will leverage Cronos’s 350,000-plus square feet of production facilities and future expansions along with MedMen’s retail brand recognition. MedMen Canada will operate only in federally legal jurisdictions and in compliance with all applicable regulations. Canada legalized medical cannabis in 2013 and is home to some of the largest cannabis companies in the world. The federal government has announced plans to legalize adult use later this year, which would make Canada the first G7 country to federally legalize adult use. MEDMEN.COM, THECRONOSGROUP.COM
88
Number of licensed medical cannabis growers in Canada in January 2018.
(Source: Health Canada)
10%
Monthly growth rate of medical cannabis patient enrollment in Canada (Source: Health Canada)
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HARVEST: Business
NUGGETS
1
SUBLIME CONCENTRATES
changed its name to Sublime Canna to reflect the company’s expansion into edibles and medicated dog treats.
2
ALTERNATIVE MEDICINE ASSOCIATION, a Canadian
3
SINGLEPOINT INC.,
company, has acquired 4.17 acres in Las Vegas for a new cultivation facility.
a Seattle-based, multivertical holding company, acquired a $1 million stake in California cannabis cultivation land.
AMANEV.COM
SINGLEPOINT.COM
SUBLIMECANNA.COM
Cannabis, Cryptocurrency Co-working Space to Open in Hollywood HOLLYWOOD, Calif. — Cannabis blockchain technology firm Paragon is finishing an 8,405-square-foot “co-working space” designed specifically for cannabis and cryptocurrency businesses. Called Paragon Space, the property is located off Sunset Boulevard near Paramount Studios in Hollywood, California. According to Paragon, the real estate deal represented the first time cryptocurrency was used to purchase property in Los Angeles County. Paragon’s own cyrpto, PRG Coin, will be the coin of the realm at the facility, used for everything from rent to vending machines. An app and wallet will be released to coincide with the space’s grand opening. The facility will begin accepting space reservations April 20. Paragon also is pilot testing seed-to-sale supply-tracking technology for mobile and web. PARAGONCOIN.COM
WeedMD, Phivida Enter Infused Beverages Joint Venture STRATHROY, Ontario — Publicly traded companies WeedMD Inc. and Phivida Holdings Inc. have formed the joint venture Cannabis Beverages Inc. (CanBev), which will focus on manufacturing, marketing, and distributing cannabinoid-infused beverages for the medical and adult-use markets. WeedMD, a federally licensed producer and distributor of medical cannabis, will be the exclusive cannabis supplier and distributor for CanBev products and will designate production space at its 610,000-squarefoot facility in Strathroy for CanBev’s operation. The facility will equip CanBev with, among other things, 25,000 square feet of packaging area and cold storage. Phivida, a premium brand of CBD-infused functional beverages and clinical health products, will be responsible for product innovation, research and development, formulation, and branding. Phivida also will sublicense encapsulation technologies to CanBev for enhanced bioavailability and solubility and create new consumer brands to serve target consumer segments in the pending Canadian adult-use market. CanBev has no current plans to move into the United States market but may consider such a move if cannabis becomes federally legal in the U.S.
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HARVEST: Business
Wine & Weed Symposium Adds Second Conference HEALDSBURG, Calif. — The Wine Industry Network has added a second Wine & Weed Symposium to its 2018 schedule. The new conference, Wine & Weed Symposium Central Coast, will take place May 10 in San Luis Obispo, California. The other, now called Wine & Weed Symposium North Coast, again is scheduled to occur in Santa Rosa during August. Both conferences will be intensive one-day educational sessions featuring cannabis and wine industry experts who will discuss legal cannabis’s expected impact on the wine industry as well as perceived opportunities in the hospitality, tourism, and farming sectors. WINE-WEED.COM
Retail Franchise Model Under Development
CERES Coin Seeks $20 Million for Cannabis Cryptocurrency Launch AUSTIN, Texas — CERES Coin in March filed Securities and Exchange Commission paperwork indicating it intends to raise up to $20 million to launch a “blockchainbased transaction network for the legal cannabis industry.” According to the company, the network will comprise a dual crypto-asset ecosystem in which both assets will be registered SEC securities. The transactional component, CERES Coin, will be a stable, collateralized crypto-coin providing frictionless transactions. The investment component, CERES Token, will allow investors to share in revenues generated by transaction fees as well as revenues generated by a separate cannabis lending business. CERES believes its blockchain securities can “solve the banking issues faced by the $20 billion legal cannabis industry and introduce an alternative investment vehicle for the $100 billion cryptocurrency market.” CERESCOIN.IO
TORONTO — Golden Leaf Holdings Ltd. and private equity firm BlackShire Capital Corp. have signed a letter of intent to develop one of the first retail franchising operations in the cannabis space. Through a jointly owned management company, Golden Leaf and BlackShire plan to launch the Chalice Farms brand in the United States, Canada, and international markets. In exchange for C$25 million in initial funding, BlackShire will own an 80-percent stake in the management company. GOLDENLEAFHOLDINGS.COM BLACKSHIRECAPITAL.CA
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| EVENTS CALENDAR |
CBD pre-Oscar event, Beverly Hills
MAY AND JUNE 2018 Event Schedule
The following is a list of select industry events taking place during May and June 2018.
CANNABIS LEARN CONFERENCE APRIL 30–MAY 2 PENNSYLVANIA CONVENTION CENTER, PHILADELPHIA Attendees receive exclusive access to regulatory timelines, business tips, and market trends from leading operators, investors, and university researchers. Programming covers best practices shaping both the Northeast Corridor of the United States and key international cannabis markets such as Canada and Israel.
CANNABISLEARN.COM
MJBIZ CONNEXT MAY 9-11 NEW ORLEANS MEMORIAL CONVENTION CENTER, NEW ORLEANS MJBizConNEXT brings together 4,000 industry innovators disrupting the space and more than 275 exhibitors. For executives growing their companies and emerging leaders looking at cutting-edge innovations. See how cannabis businesses and professionals are leveraging new technology to grow in a competitive market.
MJBIZCONFERENCE.COM
O’CANNABIZ BUSINESS CONFERENCE AND EXPO JUNE 8-9 THE INTERNATIONAL CENTRE, TORONTO O’Cannabiz explore the latest regulations, industry standards, and best practices for medicinal and recreational marijuana in Canada. An anticipated 7,000 patients, physicians, licensed producers, and industry professionals from across the world will gather to learn, network and advocate.
OCANNABIZ.COM
INTERNATIONAL CANNABIS BUSINESS CONFERENCE JUNE 24-25 SHERATON WALL CENTRE, VANCOUVER, BRITISH COLUMBIA Occurring just one week before the federal legalization of cannabis in Canada on July 1, the International Cannabis Business Conference will offer the most up-to-date industry information available. Hear from some of the most successful international cannabis brand representatives, learn from international science experts, and ask questions of global leaders.
INTERNATIONALCBC.COM
CHAMPS EAST MAY 15-17 ATLANTIC CITY CONVENTION CENTER, ATLANTIC CITY, NEW JERSEY Founded in 1999 and now one of the largest counterculture trade shows in the world, CHAMPS hosts premier exhibitors and draws buyers in the thousands from all over the world. Vendors offer glass pipes, vaporizers, cleaners, and extraction machines, among other stock. CHAMPSTRADESHOWS.COM
Harborside photo by Mike Rosati
STAY CURRENT ON ALL INDUSTRY EVENTS: MGRETAILER.COM
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HARVEST: Guest Column
Move Beyond Mistakes with a Corporate Culture of Excellence MAUREEN MCNAMARA IS A FACILITATOR, SPEAKER, COACH, AND THE FOUNDER OF CANNABIS TRAINERS, A TRAINING AND CERTIFICATION PROGRAM DESIGNED FOR THE INDUSTRY PROFESSIONAL. HER COURSES ARE DESIGNED TO ENGAGE, EMPOWER, AND EDUCATE.
I
MAGINE A DINNER PARTY where we all share some of our longsince-recovered-from mistakes. I picture relatability, empathy, and lots of laughter. There would be talk about some of the ridiculous errors we made in our first jobs or the retelling of an amazing idea that bombed. I hope you’ve made mistakes. Without mistakes, we may not be pushing ourselves or adventuring outside our comfort zones. There are degrees of mistakes. Accidently choosing the wrong way on a hiking trail may mean you are out there for an additional, unplanned ninety minutes. A mistake while checking the identification of a young person buying cannabis may mean suspension of a business license. We see people make mistakes and face challenges every day. We may see people do things that make us shake our head or count to ten while we wonder, “What they were thinking?” Before we can respond productively, we must ask ourselves, “Did they do that because they didn’t care? Or because they didn’t know?” I imagine you have worked with people who fall in both categories. The people who don’t care? Release them. Quickly. Now. People in the “didn’t know” category require training,
coaching, and mentoring. Let’s assume we are working with people who do care and share our vision for creating an industry with integrity, compliance, and professionalism. In the cannabis industry, there is too much at stake, too many opponents waiting for missteps and tremendous risk if we don’t get this right. But where do we start? STEP ONE: CREATE AND INSPIRE A CULTURE OF EXCELLENCE There are five essentials to a culture of excellence: 1. Lead positively. 2. Praise frequently. 3. Correct immediately. 4. Be involved. 5. Create accountability. It’s important to note a culture of excellence goes a long way to create a sense of pride among the team, craft quality products, prevent careless behavior, and more easily move forward if there are glitches. Let’s look at each essential. Lead positively. Is your leadership team role-modeling the excellence that sets you apart? This is about positive action. I recall teaching a food-safety class and having the
employees watch their manager break the basic principles that had just been discussed. This lack of positive role-modeling told the team, through actions, food safety wasn’t important. Do the leaders in your organization embody high professional standards? Praise frequently. Catch people doing things right and tell them. Let your team know you’re watching and you admire and appreciate their commitment. Be detailed, specific, and timely in your praise. Correct immediately. When you see or hear an employee do something inaccurately, coach them. If it is an action that will create significant damage, liability or loss, jump in immediately. If it is behavior that isn’t risky, coach them in private as soon as possible. Remember to use inspiring words. Nobody wants to hear, “You screwed that up” or “You did it wrong.” Instead, when corrective coaching, use more approachable language: “Our standards are [review specific standard]. Next time, please [employ the correct behavior or action.]” Or, try “When I saw [improper behavior], I was concerned because [insert possible violation]. Let me show you two ways to [correct the behavior].” Be involved. Be on-site. Work alongside your team. It’s an extraordinary way to see and understand what your team is dealing with and
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how they handle challenges. When changes come along or are required, you’ll know more intimately how these will affect the actual work flow. Create accountability. Having standards and operating procedures is useless unless they are available, part of a detailed training program, part of everyday culture, understood, respected, current, in action, and your team is held accountable to them. Empower your team to ensure the many details of operating a highly regulated, federally illegal business are handled properly. And document, document, document that these detailed procedures were done correctly. Speaking of details, here’s the next step in moving beyond costly mistakes. STEP TWO: LOVE THE DETAILS AND OPERATING PROCEDURES As noted above, standards are essential. If you expect compliance with standards, those standards must be written, measurable, and tracked. Procedures must, at a foundational level, meet all state and local requirements. You may also choose to have “house policies” that are stricter than required. For example, checking IDs is mandatory. Perhaps your local
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municipality requires IDs also be scanned. You may have an additional policy that all vertical IDs must be approved by a manager for entrance to your sales floor. These facets (among many others) of checking IDs must be written into policy. This can’t simply be oral tradition or something that we perceive as obvious. Have written standards that are brought to life every moment with committed teammates. Here are some stories from our streets about mistakes that—in our opinion—were avoidable. 1. Surveillance video was at a higher resolution than necessary, causing electronic storage issues. Only thirty-four days of the required forty days* of recorded footage was in the system. (*Recording requirements vary state to state.) 2. After cleaning and dusting security cameras, they were not aligned properly to capture required footage. 3. Visitor logs were not filled in properly or thoroughly. In one case, log entries were filled with sarcasm. The reason for one visit was listed as “troublemaking.” There’s no place for shenanigans while filling out mandatory paperwork.
4. Manufacturing equipment was not cleaned properly. This caused contamination of product that failed lab testing. 5. Someone unintentionally mixed together chemicals that created a toxic gas, necessitating an evacuation of the premises. 6. While assembling vape cartridges, employees weren’t wearing gloves. Important: no bare hands on product or pens where the patient’s or adult-user’s mouth will go. 7. Residual pesticides or unapproved pesticides showed up on lab tests, causing recalls and loss of product. Ask whether you are operating within a culture of excellence. How does your leadership team score in the five esentials? In what ways are your employees empowered to be part of the culture you want to create? Review your operating procedures. Do they cover all the mandatory requirements? Are they updated when regulations change? Do they represent your vision and mission powerfully?
maureen@cannabistrainers.com CannabisTrainers.com
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| EXPOSURE |
NATE GIBBS Artisan grower Nate Gibbs of Gold Leaf Gardens handcrafts the brand’s custom retail store displays for their cannabis products in-house at their grow facility in Lacey, Washington. Kristen Angelo
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| TOP SHELF |
Farm-to-Label
Craftsman Style
From a successful farm to a leading retail shop, Gnome Grown has carved out a unique space in Oregon.
F
OR MORE than twenty-five years, Gnome Grown’s farm has supplied sought-after flower to the Pacific Northwest. In fact, over the years the farm has taken on an almost mythical status. Locals wonder what arcane methods could explain the operation’s extraordinary success. Master grower and Gnome Grown founder Dan McCalister said there’s really no secret. He refers to himself as a “gorilla grower” who has a tremendous respect for the growing cycle’s perpetual motion. “A continuous, living soil fosters optimally nourished cannabis of the finest quality,” he said. “We honor holistic care for plants, soil, water, and compost. We believe the many symbiotic relationships within a healthy ecosystem create our renewed, naturally rich growing conditions.”
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Early last year, McCalister caught the retail bug and began dreaming about opening an upscale dispensary. Being an accomplished woodworker, he started crafting the aesthetics along with The High Road Design Studio’s Megan Stone. They agreed the shop would be a one-of-a-kind, signature destination that both offers a whimsical customer experience and carries the best flower in Oregon City, Oregon. The design began with custom entry doors. Created from wooden garden tool handles, the hardware is stylishly wrapped in handstitched leather and attached to the doors with powder-coated turquoise. Custom shadow boxes containing larger-than-life effigies of insects decorate the lobby, a blithe nod to the “army of critters” that are vital to organic farming. A massive topographical map fairly jumps off of the wall, telling the story of McCalister’s early training in organic farming. Handmade, oil-rubbed tin-cloth upholstery abounds, an ode to the funky apparel McCalister has worn for decades. In the bud room, colorful powder-coated Mason jar lids—the tried and true storage container for cannabis lovers—display individual buds on custom-designed hickory and linen trays. “It’s one of the cutest boutique stores of any kind you will ever step foot in,” Stone said. Sales Director Arsenio Torres deserves at least some of the credit for that. At 40, he’s a dispensary veteran, having worked at New Vansterdam and Oregon’s Finest for many years. While at New Vansterdam, he and his team secured licenses for five locations in Oregon. When the company decided to move in a different direction, Torres found a home at Gnome Grown, where he presides over a staff of twenty people he’s grown to cherish. “We have an amazing staff that is friendly and knowledgable,” he said. The majority of the dispensary’s customers seek the farm’s exceptional flower, he said. Pre-rolls and edibles follow in popularity. Torres revealed many customers drive more than an hour to purchase top-tier strains like Bruce Banner, Dutch Treat, and Tangie. When it comes to the other products the dispensary offers, Torres is especially picky, often agonizing for days about what to stock and seeking repeated input from employees about aspects such as price, shelf life, and quality. “We have been very mindful to stock producers and processors that are conscious of how they grow and what impact they are having on our environment,” Torres said. “By taking this approach, we have been able to gain the trust of our consumers.” Both Torres and McCalister are sticklers for education, requiring each new staff member to undergo a five-day training regimen. Neither would ask an employee to perform any task they are not able or willing to perform themselves. Then there’s communication and respect, both pillars of the company’s ethos. “If a staff member has not been given the tools to be successful, then I am the one who holds the blame,” said Torres. “It all starts with communication and respect for each role in our operation.” Torres starts each day at 6 a.m. with a big pot of coffee before heading for the farm in Canby, about twenty-five miles from the dispensary. While at the farm, he and the founding partners and
“
We have been very mindful to stock producers and processors that are conscious of what impact they are having on our environment. By taking this approach, we have been able to gain the trust of our consumers.” — Arsenio Torres, sales director growers discuss issues requiring attention, strategies, and changes in regulations. When it comes to cannabis businesses, managers must be flexible, he said. “Really, my day-to-day duties vary, depending on what is happening in the industry,” he noted. “The cannabis culture is still developing its maturity every day, and that comes in a variety of different forms: trade shows, promotional events for the rec consumer, regulation changes, etc. All of it keeps my life pretty exciting on a day-to-day basis.” Because of Torres’s prolific background in retail cannabis, Gnome Grown has avoided most of the pitfalls with which other shops have had to deal. “We have had some issues with permitting for small things like where our sign can be placed, but we have gone relatively unscathed compared to some of the horror stories I have heard,” he said. Is there anything that keeps him up at night? “Yes,” he said. “The current [presidential] administration.” —Rob Hill Gnome Grown | 719 Molalla Ave, Oregon City, Oregon 97045 GnomeGrownOrganics.com
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5
| TIP JAR |
Essential Skills that Make a
Good Budtender
T
HE PROLIFERATION of new regulations, especially in states with brand-new medical or recreational programs, can make life challenging for dispensary employees. For instance, one day a bestselling item fairly leaps off the shelves, and the next day regulations prohibit its sale. Or, the delivery of a shop’s favorite flower may be delayed due to licensing issues. Even when regulations have been stable for a while, angry customers, unreliable vendors, and the constant quest to increase revenue can exact a toll on the most easygoing budtender, manager, or owner. What do you do? Here are some pointers.
1. Find a reliable point-of-sale system.
Make sure the software tracks sales, inventory, and patient information. Spend time each month ensuring all data is correct and current. Always keep a backup on a thumb drive in case you need to recover from a catastrophic system failure.
2. Be patient.
All retail jobs require patience, but the skill is especially important in cannabis retail. Many customers are novices and have only word of mouth to guide them about dosing and alternative medicating opportunities. They ask a lot of questions. They don’t understand milligram dosages. They need lots of handholding. If you find your patience wearing thin, take a deep breath. If that doesn’t reset your tolerance meter, take a short break. Meditation before starting a shift can help, too.
3. Take notes.
Always take notes when meeting with vendors. Remember: Vendor meetings are the best opportunity to get the most detailed information straight from the source. Taking notes ensures the information will be available the next time you need it.
4. Study the plant.
Read as much as you can about cannabis’s history and uses, historical anecdotes, and why weed is so magical to so many. Spend time visiting growers. If it’s legal in your area, grow your own plant and watch the lifecycle “from seed to sale.” An up-close-and-personal relationship with the plant may not make you an expert about everything cannabis, but it will give you a solid base of knowledge you can invoke to educate customers.
“
Angry customers, unreliable vendors, and the constant quest to increase revenue can exact a toll on the most easygoing dispensary employee.
5. Sample, sample, sample.
Speaking of personal relationships… The best way to provide an honest recommendation for a product is to try it yourself. First-time cannabis users, in particular, may be nervous about a product’s potential effects, dosage, etc., but a recommendation based on personal experience can set their minds at ease. If they feel comfortable with your review, they’ll feel comfortable buying the product. —Rob Hill
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Pick the POS System that’s Right for You COVA Cova is designed for speed and efficiency, allowing budtenders to focus on providing customer service. The system includes scanning for registering and checking in customers, search auto-complete functions, and auto-apply for taxes and discounts based on membership level. An offline mode means checkout lines keep moving even when Wi-Fi is down. COVASOFTWARE.COM
PROTEUS420 Proteus420 runs in real-time and can assist all levels of business from dispensary to delivery. The system includes HIPPA compliance and data security, real-time visibility across the organization, and employee-controlled access. PROTEUS420.COM
TREEZ Created by a team of cannabis professionals, attorneys, and tax specialists, Treez promises faster customer intakes, increased sales, and virtually zero inventory discrepancy. The system’s features include point-of-sale hardware, analytics, constant compliance, inventory management, and constant connectivity. TREEZ.IO
WEBJOINT An all-in-one software package that helps cannabis business owners manage their patients, finances, employees, inventory, and website, WebJoint’s tools were created to save time by increasing productivity while also helping businesses gain exposure online. WEBJOINT.COM
GREEN BITS With the mantra of “compliance, compliance, compliance,” Green Bits aims to deliver 100-percent accuracy with state reporting, prevent individual sales from exceeding state regulatory caps, capture customer information, and generate compliant receipts, labels, and inventory audits. GREENBITS.COM
MJ FREEWAY Especially useful for dispensaries that also operate grows, MJ Freeway guarantees state and federal compliance and is integrated with state systems where possible. The system is able to track each gram, minimize product loss, track return on investment, and store all customer information. Multilingual, the product is available in English, Spanish, and French. A German-language version is in development. MJFREEWAY.COM
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| SPOTLIGHT: Branding |
Believe in
Brand Magic
A creative director, a branding guru, a sports and entertainment agent, and a business-savvy tech wiz walk into a bar…
A
SK MADISON 8 Chief Executive Officer Christine King about her icons, and she’s quick to point out Ogilvy Mather. The legendary New York City advertising, marketing, and public relations agency founded by Edmund Mather in London in 1850 has worked with iconic brands including Guinness, IBM, Rolls Royce, and Schweppes. King’s second fascination is with Jane Fonda. “Look at her—she’s 80,” King said. And then there’s Miley Cyrus: “She’s so smart and knows how to brand,” according to King. In addition to her role as a partner in Madison 8, King also founded TMG International, a marketing and brand-development agency specializing in beauty, wellness, and lifestyle products in both the luxury and mass markets. She said she has seen just about everything when it comes to product launches, but when she began researching CBD and cannabis
“ Branding is a delicate dance. There is a lot of work and communication to get through, even with a small project. Having the experience to diagnose company culture, personality, and project is key. — Gavin Antill, co-founder
companies, her creativity was piqued. “I founded TMG International to specifically focus on the luxury sector,” she said from her office in the tony Golden Triangle neighborhood of Beverly Hills. “The agency has been at the forefront of creating innovative strategies and branding campaigns for luxury skincare, haircare, jewelry, and lifestyle companies. And now with the increased interest in cannabis, CBD, and hemp space, it is perfect timing for us to bring our skills and extensive network of contacts to the industry. Our goals are to effectively and creatively market existing brands as well as work to develop our own brands.” King, fresh off her fourteenth annual TMG Luxury Suite, an Oscars-related soiree at the Beverly Hills Hotel, has weeks’ worth of cannabis-related meetings on her calendar. “Everyone is interested in CBD,” she said, gesturing out her window at the shoppers scurrying about.
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What does she think she can bring to the burgeoning industry with Madison 8? Quite a lot, actually. She’s spent a career traveling the world to keep her finger on the pulse of what’s new and innovative in both the prestige and mass market consumer and retail spaces. She’s delivered creative and product formulations to clients including Gucci, Jaguar, Rolls Royce, Kérastase, and Cartier. She measures success with her clients by developing a brand concept that resonates with targeted consumers, then following through from concept to shelf. “There’s nothing like the rush you see or feel when a product you have worked so hard on ends up on the shelf and in a consumer’s hands. [The feeling] never gets old,” she said. If you ask her to describe Madison 8 in a few words, she doesn’t even take a breath before responding “innovative, revolutionary,
“Brand building is a delicate dance,” he asserted. “There is a lot of work and communication to get through, even with a small project. Having the experience to diagnose company culture, personality, and project is key.” Historically, according to Antill, experience and talent win the game, but bringing together an all-star team is imperative. Finding the right partners took a few months, but the crew finally came together. After King, Madison 8 drew in Stephen Bugbee, a technology consultant who specializes in sales, marketing, and operations. Bugbee sits on the board of multiple cannabis businesses including Alternate Health, which created a regulatory management system used in Canada and multiple U.S. states. Recently, Todd Hahn sold his sports- and entertainment-management agency and joined Madison 8 as a parner.
4 Tips for Brand Creativity 1
2
BE FLEXIBLE. Over-planing can kill the magic. Allow flexibility for a game-changing creative win. KEEP THINGS SIMPLE AND SAVVY. The smartest brands work tirelessly to defeat complexity.
3
CREATE STORY VALUE. Story value, truth, and soul are a recipe for success.
4
BUILD A LIFESTYLE, NOT JUST A BRAND. If you do this effectively, you’ll create brand loyalty. MADISON8.COM
timely, opportunistic, intelligent.” Sounds a lot like the cannabis industry at the moment. “Bingo!” she said. Sitting at a cafe on Rodeo Drive, wearing his signature all black with his silver Richard Gere-esque hair covered by a camouflage cap, Madison 8 founder Gavin Antill looks like a poster boy for the L.A creative scene. Antill grew up in the advertising world depicted in Mad Men. As a kid, he would often accompany his father, a wellknown creative director, to work. Now a seasoned creative director himself, Antill has worked for such agencies as Gray Advertising and Draft FCB. Madison 8 was a logical next step for him. “Madison 8 is about innovation and progression,” he said. “Our clients range from state-of-the-art product formulation technologies for CBD, cannabis, and hemp to some amazing emerging beauty brands.” Antill launched his own cannabis product in December 2017: BLKBRDCBD, a gritty male-action-sports brand he said he wishes had been available when he was motocross racing. In the thirty years since he gave up the bone-breaking sport, he’s worked with mainstream clients on creative strategy, brand development, advertising, and digital media. He said he’s learned a thing or two.
Now, with the team’s first Oscars-related CBD luxury suite declared a smashing success, potential clients are becoming curious, Antill said. He’s been here before. An up-close observer of the tech boom, he said he sees many similarities in the green rush. “We’ve been through several gold rushes,” he noted. “This green rush has many similar and very unique issues, but our experience is that creativity and innovation are always a great byproduct.” Back at the office, the staff wraps up a meeting in a penthouse office with views of the Hollywood Hills and beyond. Today’s topic, Kana Skincare, excites the team. “The owner, Janice Buu, is really onto something here,” Antill said. King believes the combination of ingredients is a winner. After everyone else leaves, King stays behind, taking notes. She scribbles furiously like a passionate intern ready to prove herself. What’s keeps her so giddy? “I believe in magic,” she said. “If you find the right branding agency who can become your partner, that’s called making the magic happen.” —Rob Hill Above: Christine King with Madison 8 account managers Opposite: Partial team clockwise, Alex Stewart, Ruben Dias, Gavin Antill, Christine King, Stephen Bugbee, Todd Hahn and Cara Julian
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| SPOTLIGHT: Design |
Making a Point of
W
Good Retail Design
HAT DO MAINSTREAM retail brands COACH, Louis Vuitton, J.Crew, and Casa de Montecristo have in common? A design-build team with combined experience of more than thirty years that focuses on telling a company’s story, not just creating a pretty salesfloor. Now that service is available to retailers in the cannabis space. Robert Turk and John Simmen founded Toronto-based Seven Point Interiors with the goal of providing clients everything they need from the first spark of an idea. A division of parent company Visual Elements, also of Toronto, the firm offers services including architecture and engineering, construction and project management, interior design, custom displays and fixtures, brand development, and graphic design. The mandate: Bring brands to life. “We understand retail and know the process required to design, develop, and open whether it be one prototype location or a rollout of hundreds, on time and within budget,” said Danielle Marzarella, vice president of business development for Seven Point. “Together with [our partner] Tricarico Architecture and Design and our experienced team of in-house designers, engineers, project managers and procurement experts, we have the experience and creativity to develop custom designs or standardized solutions fitting into all
types of environments and clients’ budget requirements.” Several projects are in the pipeline in different stages from design to construction, including interior design and fixture manufacturing. One of the most recent is for Spiritleaf, a premium recreational cannabis retail chain based in Alberta, Canada. The company’s franchise division recently secured 100 new locations. Ultimately, Seven Point and its partners intend to help Spiritleaf create a nationwide chain of stores that strongly reflect the corporate brand by employing the same approach major mainstream chain retailers use to create lasting awareness in customers’ minds. “With the prototype design complete, we are starting the fixture manufacturing process and look forward to seeing this amazing brand as the design truly comes to life,” Marzarella said. “Our talented design team at Tricarico Architecture and Design captured the essence of the brand through the development of a creative concept package followed by a design that captured the inspiration behind Spiritleaf as a brand.” Jackie Dosne, Spiritleaf ’s design coordinator, said a close working relationship with a design team that shares clients’ vision is imperative for transforming a concept into reality. “Seven Point Interiors really listens to their clients, specifically in terms of custom requests, which I think is key to a working relationship between
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client and production for project deliverables,” she said. “Through this synergy, beyond the functionality, the end result feels inclusive and unique to the client’s needs. This shows the far-reaching design efforts of Seven Points Interiors.” Timely execution also is key to a successful project, Dosne noted. “Seven Point Interiors understands the importance of followthrough in the deadline-driven design world,” she said. “This efficient follow-through, combined with their enthusiasm for their craft, adds additional high quality and identity.” Not only can purposeful design bolster individual retailers’ bottom lines, but attention to the way brands are perceived in the mainstream also can play a pivotal role in the normalization of cannabis. “We are passionate about design and creating amazing spaces for people to enjoy, get inspired by, and be part of their lifestyle,” explained Nicole Tricarico, a member of the Tricarico Architecture and Design team who works closely with the Seven Points staff. “Good retail design begins with an understanding of the brand identity, and creating a bridge between the brand’s lifestyle elements and the overall customer experience enables a successful retail outcome. “With where the cannabis movement is currently, it’s important when designing that we educate consumers that the days of blackout windows and taboos of cannabis are no longer the norm,” she added. “These environments can be welcoming, look upscale, and be a relaxing experience.” — Leah Maurer SEVENPOINTINTERIORS.COM
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| SPOTLIGHT: Horticulture |
Artisans of AlpinStash AlpinStash’s practitioners of whole plant love hope horticulture will heal the world.
D
EEP AT HEART, AlpinStash Chief Executive Officer Dan Sloat is a plant worshipper and his goddess is cannabis. That’s easy to see in the way he describes strains like Lemmiwinks #4 in an educational video that shows him touring Konoha, the farm’s largest grow room. Konoha is a Japanese term that, roughly translated, means “village hidden in the leaves.” “This is an in-house cross of Crouching Tiger, Hidden Alien and White Rhino,” he said of Lemmiwinks #4 while carefully walking through the racks of eight-week-old plants in Smart Pots. “Super stoked on this lady. She smells like grape candy. You can see she’s super-resinous and tested over 20 percent last round and has a real nice fade on her.” Sloat stepped onto a ladder to reveal the sevenfoot plant canopy, studded with fat colas, swaying slightly in the current of cooled air coming from tons of cooling units whirring and hanging from the ceiling alongside lots of LED lamps.
“ I often say elbow grease and heart are our magical ingredients. In general, we don’t use any ‘special techniques’ and we happily share our knowledge. — Dan Sloat, CEO, AlpinStash
While he insists Konoha is a fairly typical indoor grow, Sloat and crew at Coloradobased AlpinStash are high practitioners of craft cannabis in a shrine built for the love of the plant. They want to spread the good news about the whole plant—the medicinal benefits, the natural cannabinoids and terpenes, the sheer beauty of buds, how to grow the object of their worship, and how plant medicine can be used to help the human condition. They think cannabis could, maybe, even heal the whole world. “It all starts with love and passion,” Sloat said. That, and naturally robust, healthy plants. “We do everything by hand—from mixing nutrients to watering to trimming to curing. I often say elbow grease and heart are our magical ingredients. In general, we don’t use any ‘special techniques’ and we happily share our knowledge. You can visit AlpinStash’s YouTube for information on pollination, sexing, plus peeks inside the flowering harvests.” Sloat is not shy about sharing information
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with other farmers and would-be growers on the company’s YouTube channel, which has more than 1,700 subscribers. He’s an apt speaker on lights, nutrients, growing supplies, and set-up, as well as AlpinStash’s strains. The instructional videos include topics from how to properly top plants to planting seeds and collecting pollen. “It’s really, really tough to obtain good and accurate information on growing cannabis,” he said. “There are so many old wives’ tales and lots of pseudoscience out there. In the cannabis world, everyone claims to be a ‘master grower’—a term that has certainly lost its significance. The joke is that if you ask a [question at a growing] forum and 100 people respond, you’ll get 100 different answers. “I read a number of books on cannabis cultivation when I was just starting out, to get an idea of what I was doing. I found that to be a good starting point,” he recalled. “The books contained some good information and pictures, which were very helpful at the time. Then, I took horticulture classes, which were immensely helpful. Learning about growing plants in general is a great place to go. When I have questions about certain aspects of growing cannabis, I research how the scientists are doing it and apply that to cannabis. After all this, it’s been a lot of trial and error.” While the emphasis is on craft at AlpinStash, Sloat and his crew use technology to document what works and innovate, but only when it makes sense to implement tools that will improve conditions for the plants and, consequently, consumers. “We have begun using clones started in tissue culture—a way to make clones that are free from diseases,” he said. “So far we have had good results, and we look forward to gathering more data on the benefits of this process. Other than that, we don’t use a ton of technology. We tend to do things by hand to ensure our plants and product get the love they need to thrive.” AlpinStash’s roster of signature strains all have diverse terpene and cannabinoid profiles that include various levels of CBD. Cura is a 2:1 CBD-to-THC strain. Another, named Sister Wife, is said to be very good for menstrual cramps, Sloat said. With virtually no detectable THC content, a strain called simply Wife tests at 21-percent CBD. Django is a sativa-dominant, CBD-rich phenotype of classic strain Jack Herer. A beautifully balanced strain called Dr. Dorian offers consumers just a touch more THC with an almost equal level of CBD. “Our outlook is that plants know how to grow; that’s what they do best. We just provide them with the best conditions and the love they need,” Sloat said. “One thing we do that isn’t as common is pay extra attention to keeping a clean facility. We have grow-only clothes and shoes, which we all change into and out of, and we clean and sterilize all surfaces and tools regularly.
“We pay extra attention to what our nutrients are made out of and where those ingredients are sourced from, and we support companies who have similar outlooks and focus on the ethics that we hold dear. These companies include Nectar for the Gods, Grain Fed Worm Castings, and Cultured Biologix,” he added. Exotic Genetics provided the seed stock for one of Sloat’s favorite strains, he’s proud to say: Hidden Tiger, Crouching Alien is a parent of Lemmiwinks #4. AlpinStash is also partnered with Front Range Biosciences, which is working with several producers to sequence the cannabis genome. Expanding global and domestic cannabis legalization means growers constantly are learning new things about cannabis and its industrialization. Countries like the Netherlands with advanced horticultural technology and Israel with its pioneering work in cannabinoid research may lead the curve for now, but Sloat said he thinks American cannabis growers will develop farming innovations for traditional crops. “The cannabis revolution will help further the science of growing indoors in a controlled environment, and crops like microgreens and lettuce will benefit from this,” he predicted. “This includes energy-effect lighting such as LEDs. “Beyond this, I don’t really know,” he continued. “I know enough to know there are a lot of really, really talented folks in the horticulture and agriculture fields, and there have been hundreds, if not thousands, of years worth of research that humans have put into growing plants. It’s hard for me to see how this new industry will suddenly change this. It will add to it, however, and it has sparked a lot of interest within people. The more people who grow plants, the better the world will be.” Whatever else Sloat can read in the tea leaves about the cannabis industry’s future, the AlpinStash crew is betting craft cannabis will have a magic effect on consumers and connoisseurs, even when big corporate entities come to throw their weight around and crush the little guys. “I see the demand for craft cannabis will increase, while there [will be] a consolidation of the low- to medium-grade producers— those who put quantity above quality,” Sloat said. “When the big boys come in—Monsanto, Philip Morris, etc., and come in they will—they will swallow up every business they can. I think we’ll see a parallel with the beer industry, in that there will be a few huge producers who have a large share of the market and a number of craft folks who have the knowledge, talent, and passion to produce a truly artisan product.” —Joanne Cachapero ALPINSTASH.COM
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| SPOTLIGHT: Payment Processing |
Don’t GET STONED Without It
Inexpensive, portable, and easy to use, the LINX debit card offers a new way for people to pay for weed.
P
ATRICK HAMMOND understands payment software systems better than most: In 2009 he founded a financial technology company that developed a software suite for the stored-value card sector. The product was a huge success, he said. The same technology formed the basis for his current endeavor, the LINX Payment Network, a solution for retail cannabis. Hammond, LINX’s chief executive officer, saw the opportunity in 2015. “I had a meeting with the CEO of another company with which we had partnered. They activate the gift cards you see in grocery stores like Safeway,” he said. “The existing knowledge that we had in the distribution and management of open- and closed-loop gift cards, coupled with this CEO’s insight into payment problems, made for an interesting discussion when it came to cannabis.” Hammond was astounded such a large and quickly developing market had no access to electronic transactions. Realizing the mass quantities of cash that move through the industry had to be addressed, he made the leap into cannabis. LINX now operates in nine states: Alaska, California, Colorado Connecticut, Maryland, Montana, Nevada, New Mexico, and Oregon. In 2018, the system will enter the market in Arizona, Florida, Illinois, Massachusetts, Michigan, New York, Pennsylvania, and Washington. All banking and processing relationships are with U.S. banks, and the company complies with all federal and state guidelines for stored-value cards and cannabis. When he launched LINX, Hammond didn’t realize similar cards already had failed. Some were shut down and some products didn’t work; others weren’t compliant with state and federal rules. Hammond had to work hard to prove to dispensary owners that LINX would be different. “When we launched, we had this fantastic solution and the best goals, but we couldn’t get a meeting,” he said. “Everyone was like, ‘Oh, payment processing for cannabis? We’ve heard that before, and it’s not good.’” But Hammond knew if he could get a few clients, word of
mouth would do the rest. “Most of our sales are now made based on word of mouth,” he said. So, how did Hammond and LINX accomplish what no one else seemed able to do? “LINX has established relationships with the payments and credit and debit card processing industry,” he said. “We continue to work with established and new financial institutions, banks, and compliance systems. We currently provide credit and debit processing to retail dispensaries and are now connecting our backend software to several tax-collection entities.” In addition, LINX is beta-testing a payments marketplace that will allow the rest of the cannabis supply chain—vendors, distributors, growers, testing labs, etc.— to pay each other electronically. “This launch will revolutionize how the cannabis ecosystem handles payments,” Hammond said with a Cheshire Cat grin. While word of mouth is fantastic, it’s Hammond’s dedicated internal sales team that will take the company to the next level. “Once someone sees what we do, they want it in their stores,” he said. LINX operates in much the same way as “prepaid credit cards” or gift cards offered by Starbucks and other mainstream retailers. Consumers use a traditional credit card or debit card to load the LINX card, and the network’s software does the rest. When a consumer makes a purchase, the system electronically transfers the appropriate funds from the consumer’s card to the merchant’s account. Eliminating cash from the purchase process makes everyone safer and adds convenience to transactions, Hammond said. The company offers an option for retailers with branding in mind. “We offer both the network LINX card, which can be used anywhere LINX is accepted nationwide, and co-branded cards with the retailer’s logo on them,” Hammond said. — Rob Hill LINXKIOSK.COM
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| CORNER OFFICE |
Taking a Bite
Out of the Competition Korova Chief Executive Officer Steve Adkins says the company’s preparedness for adult use gave it a leg up over the competition.
J
OE GERLACH, who founded Korova in 2011, grew up in a family that loved to bake and has been making edibles his entire adult life. In the early 2000s, he sold infused goodies at Reggae on the River festivals. As the lead baker for a now-defunct edibles company, he learned to scale up production without any previous experience in the art. He developed a clear vision of where the sector was heading. “Baked goods have always been a favorite—people making cannabis-infused butter and edibles in general,” he said. “Ninety-nine percent of all THC becomes active, ensuring a very effective final product.” In 2010, Gerlach decided to make a go of producing his own medical cannabis edibles, creating Korova with Ashley Goldsberry. Their core brand value would be “to help people.” Their slogan: “Unrivaled Potency.” Korova began making cookies with gargantuan doses— from 150mg to a whopping 1,000mg. But Gerlach and Goldsberry didn’t stop there. They crafted recipes to suit special diets, like their six-dose Organic Peanut Butter Bar for vegans. The treat is made from organic peanut butter, gluten-free oats, vegan chocolate coating, cannabis-infused coconut oil, and agave syrup. When it came time for Korova to select a chief executive officer, there was only one man for the job: Steve Adkins. Gerlach saw in Adkins the perfect
executive to take Korova into the future. Prior to joining Korova, Adkins, 51, served as a senior vice president for Jamba Juice for fourteen years, and prior to that spent a decade at Fresh Choice. Adkins oversaw the opening of hundreds of Jamba Juice locations and worked in every facet of the company. “They’re still a brand very close to my heart,” Adkins said. “I still stop in for a Razzmatazz from time to time.” As for Korova, eight years after the company’s birth, it employs more than sixty people. Adkins said sales are increasing all the time, partially because of some very savvy business moves.
“
Korova is much more than a brand. it’s a lifestyle and a movement. — Steve Adkins, CEO, Korova
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“January saw almost a doubling in sales over previous months,” he said. “We have licensed partners in Arizona (Polaris) and Nevada (Sublime). They are both doing very well. Arizona still carries the full highpotency line. It’s like 2013 over there.” Perhaps the smartest thing Adkins and the company did was to plan for California’s segue into adult-use long before the state itself began planning. Adkins began transitioning the company’s packaging into a child-resistant model before the regulations were finalized. He said Korova believed child-resistant packaging was the responsible thing to do. As a bonus, beating the packaging rush made Korova’s move more economical than what awaited competitors who waited until the last minute. “We wanted to be ahead of the curve and made sure we were first to market with a fully compliant, childresistant pouch,” Adkins said. “Seeing how previous state laws had played out with dosing, we planned to launch 10mg mini cookies in 2017, giving our customers a chance to get familiar with what 2018 was going to look like.”
mg: WHAT ARE YOUR DAYS LIKE AT KOROVA? Steve Adkins: My average day usually starts in the office early in the morning. We’ll have quick marketing, sales, and innovation meetings. We’ll make sure our timelines are met and projects are coming along. I’m a big fan of stop-lighting our progress. That sets the team in motion for the week and allows me to check in with production at both the bakery and the grow facility. Keeping quality at its peak for an operation like this is something we work on constantly. Without the right people in place, it can unravel quickly. We distribute all the way from Humboldt to San Diego, so our logistics can be a bit complex. But we’re very nimble and have learned to adapt over the years, so checking in with transportation and inventory is a daily routine, as well. We recently brought an amazing procurement manager on board, and she’s been great at setting up a fantastic supply chain with us, so I’ll check in with her. Accounting follows, and after that human resources. The rest of my days are filled with crunching numbers,
Anatomy of a Successful Line From cookies to flower to CBD and merch, Korova is doing something right.
MINI COOKIES:
Flavors include the best-selling chocolate chip, mint chocolate, peanut butter, oatmeal, lemon poppy, double chocolate, ginger chew, and vanilla bean CBD. 100mg in each cookie. For CBD cookies, 15mg CBD.
Flower:
Strains include THC Bomb, a mood lifter full of limonene terpenes; Mendo Breath, a heady mix of OGKB and Mondo Montage; Super Silver Haze, the legendary High Times Cannabis Cup winner from 1997, 1998, 1999; Pie Face, bred by the legendary Purple City Genetics; Gelato, a tasty hybrid grown by Cookie Farm Genetics; and Cookies, an anti-inflammatory star cultivated in collaboration with Purple City Genetics.
Merchandise:
From tie-dyed cow shirts to clockwork Homer Simpson pins to ball caps, Korova sees the marketing value—and profit—in merchandise.
KOROVAEDIBLES.COM
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| CORNER OFFICE |
long-term game plans, and navigating the everchanging cannabis landscape. My job is to take the founders’ vision and bring it to fruition in the most efficient way possible.
KOROVA HAS ONE OF THE MOST DISTINCT AND TALKED ABOUT LOGOS IN THE INDUSTRY. WHAT’S THE STORY? When people ask us this, I always respond with a question of my own: “Have you seen the movie A Clockwork Orange by Stanley Kubrick?” If you have, you’ll remember the hangout for the Droogs was called the Korova Milk Bar, where patrons could get high from drinking infused milk. That was our jump-off point. If you look at our cow, you’ll notice it’s wearing the same Bowler hat and eyelashes the main character wears in the film, as well. To top it off, Korova means cow in Russian, so that narrowed our choices for mascots. The rest is history. We hope it gives our customers a feeling of being inside an unknown club that ordinary people know nothing about.
WHAT’S YOUR MARKETING PHILOSOPHY? I would say it all comes down to knowing your customer. How do they want to interact with our brand? When we interact with our people out there, we find the things they’re passionate about. What they think is cool. What they think is useful. Being genuine. Letting the brand speak for itself and letting there be some mystery to it. New cannabis companies are starting to look like tech startups, and we feel that’s a real missed opportunity to strike out with some fun brand ideas.
KOROVA BEGAN IN A SHARED KITCHEN IN 2010 AND NOW HAS MORE THAN SIXTY EMPLOYEES. WHAT WERE THE COMPANY’S MAIN OBSTACLES? We’ve dealt with and overcome many obstacles. Starting in a shared catering kitchen and outgrowing it very rapidly and having a series of manufacturing locations become non-viable were a few. Finding a town
that we were able to operate in without problems has been a tough issue over the years. Eventually we ended up in Oakland, where we have a fully permitted and licensed cannabis bakery and extraction lab. Expanding distribution capabilities, product innovation, and development have all been hurdles we’ve overcome over the past seven years. The new regulations have brought their own set of new challenges with having to collect all the taxes, and soon the track-and-trace program. None of these hurdles are insurmountable, and we look forward to meeting the challenge.
THE KOROVA LINE NOW INCLUDES CBD, EDIBLES, FLOWER, MERCHANDISE, ETC. WHAT ARE YOUR BESTSELLERS? We just launched a limited-time, low-dose product called Twofers, where you get two full-sized, 50g cookies or bars at 10mg each. We’ve had a strong demand for a low-dose option, and we think these will be priced to move. Mini cookies have had a phenomenal response, Saturday Morning and Chocolate Chip being the most popular. We also still have many of our original products just now limited to 100mg of THC, including a few CBD options. Finally, there are still some infamous 1,000mg THC products out there that are sure to be gone within weeks of this article being published. We also have a newly launched premium indoor flower line. It’s been a year in the making to get our grow facility up and running. We’ve launched with six strains. We’ve also partnered with Bay Area legends Purple City Genetics to bring their award-winning strains to market, which were hand-selected for their THC content and terpene profile.
AND THE COW MERCHANDISE? People absolutely love our cow merchandise. It’s one of those icons that people “who know” will give you a knowing nod while a non-smoker wouldn’t know it had anything to do with cannabis. People even have our cow
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| CORNER OFFICE | tattooed on them. We try to keep our neighborhood dispensary staff stocked up on good merchandise, as well as make it available on our website. We have some great new limited hat pins in the works currently.
HOW MANY DISPENSARIES CARRY KOROVA PRODUCTS? That number is clearly not what it was. At the peak of 2017, Korova could count over 1,000 open accounts we actively dealt with. Currently, we’re only dealing with licensed clubs, and that number is nowhere near a thousand. But every week we’re seeing more and more clubs come online, and that’s great. We take a lot of pride in helping guide our existing accounts through the new regulations, as well. They can call us and ask our customer service team, and if [team members] don’t know the answer they make sure to find the answer and get back to you. They also enjoy a challenge.
DO YOU HAVE A BUSINESS HERO? I don’t know if I’d call him a business hero, but I recently came across the founder of RAW papers in several YouTube videos and I had to really admire his passion for the product he made and his true understanding of how his customers wanted to use his products. I think
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he mentioned having upwards of eighty SKUs for different papers, pre-rolls, or rollers/grinders because people all smoke differently. I thought that was great.
WALK US THROUGH YOUR NEW FACILITIES IN OAKLAND. We have a very family-oriented vibe. People are excited to work for this company, and we’re excited to have them. We try to create an environment where we coach people and inspire them to be the best they can be at all levels of this company. We’re working on a plan to unify our offices and our manufacturing in the future, and I really see that being when the synergy with the entire team will really kick off. Also, Tie-Dye Friday has been a fun addition to unofficial office policy.
WHAT IS THE SECRET TO KOROVA’S SUCCESS? Consistent products from our bakery team, a great customer service team, timely distribution by our drive team, solid branding from our marketing team, and a very loyal customer following that have been on this journey with us. Together we make up the Korova family, because they love us as much as we love them. Korova is much more than a brand, it’s a lifestyle and a movement. —Rob Hill
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| EXECUTIVE PROFILE |
All in a Day’s Work Rob Ribeiro, general manager of Los Angeles’s Fountain of Wellbeing, is committed to patients, detail, and professionalism.
R
OB RIBEIRO is a planner. Prior to becoming the genral manager of Fountain of Wellbeing (FWB), he focused on technology sales as both an entrepreneur and an executive for multinational companies. In those positions, he mastered the art of complex project planning, deployment, and operations, as well as working with the media. All the skills came in handy when he was tasked with prepping FWB for adult-use sales. Although no amount of planning can prevent some hiccups, Ribeiro was pleasantly surprised by how smoothly the transition went at the North Hollywood, California, shop. The main issue? Helping previous medical patients adapt to new, and complicated, regulations—especially the one that limits edibles to 100mg THC. “The majority of medicinal patients need higher doses of THC,” said Ribeiro, adding that achieving the proper dose “can be costly and unhealthy for a patient
who needs 40mg per serving and can’t consume a large amount of fat or sugar.” Ribeiro said he prepared for the advent of recreational use by studying the new regulations, including those for packaging, but some vendors didn’t. Meeting the mandate for child-resistant packaging, for example, resulted in a degree of confusion. That particular regulation is “extensive and confusing but good for the general public’s safety,” noted Ribeiro. Despite the inevitable stumbles after implementation of new regulations, Fountain of Wellbeing has almost doubled its patient count since January 1, when adult use became legal in California. Patient numbers would be even he higher, Ribeiro noted, if not for the illegal shops and delivery services that operate in the neighborhood. “We are bleeding sales because of the lack of law enforcement,” he said. His solution: offer premium products at competitive prices in a clean and welcoming environment. A little more than a year after Ribeiro assumed the
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operates an extraction and distribution business. helm at FWB, the store’s staff of four sees 100 Management of the disparate operations keeps to 140 customers a day. “The way the employees Riberio very busy. “We are building this based are willing to wear many hats and go above and on the new compliance rules, so a lot of my day beyond is tremendously inspiring to me,” he said. goes towards making sure everything we do is While he generally lets “my incredible staff ” ‘by the book,’” he said. “We endeavor to be a work with the customers, he periodically speaks pioneer in the industry for compliance.” with patients about their experience. The Ribeiro begins each day planning the daily feedback has been invaluable in helping FWB special and making sure the products and create a superior consumer experience and loyal prices are updated on the in-store digital board, shoppers, he said. Weedmaps, and Leafly. As time permits, he To ensure the shop runs smoothly, Ribeiro scours the Internet and magazines for new and the owners invest in extensive budtender products. When he meets with new vendors, he training, ensuring staff members know the always asks about their social media presence. profiles of every product stocked. The shop’s “I want to see how they push their products,” sales breakdown has remained consistent since he said. launching in 2006: Flower composes 70 percent How does he select inventory? of sales, while concentrates produce 25 percent “We have the most selective process to ensure and edibles account for 4 percent. — Rob Ribeiro, general manager, our customers receive only the highest quality When it comes to flower, Ribeiro has noticed Fountain of Wellbeing products,” he said. “When a certain brand is a trend: Rare hybrids like Wedding Cake and requested by one of our clients, we immediately Triangle Cookies are flying off the shelves, but he believes sativas will receive more attention as the number of first- research it to see if it would be appropriate to stock.” FWB’s buying manager has been in the business for more than time users rises. “Sativas like classic Blue Dream and Sour Diesel may have a revival through the year, with more interesting genetic six years. When looking for trends, he consults BDS Analytics. crosses,” he noted. “But for me, KNBIS’S Wedding Cake strain is He also takes the old-fashioned approach and listens to clients. Even though Ribeiro is a veteran manager, every once in a while the most quality a consumer can find for the dollar. In review after review, online and in person, our patients have clarified that it is something surprises him…like the recent visit FWB received from Vanessa Lavorato of Marigold Sweets. The celebrity cannabis quality, not quantity, they are after.” The shop’s design is fresh and tidy with the highlight squarely on confectioner and a professional photography team descended the products. A quaint window provides a view of a fecund grow on the shop for a magazine photo shoot. The staff was awed, and room, allowing patients to see the flower in all its glory before FWB’s social media channels went wild. “I didn’t realize how young women hoping to get into this industry buying it. “It’s amazing how people love to see the plants, and are so inspired by someone like that visiting our shop,” he said. everybody is always stoked about the shop,” Ribeiro said. Ribeiro works closely with the master grower to keep up with “I hope we continue to be a beacon of professionalism.” new strains and what may work for FWB’s clientele. The store also —Rob Hill
“ IN Review after
review, online and in person, our patients have clarified that it’s quality, not quantity, they are after.
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| COVER |
THE BRAND BROTHERS Medically Correct is building a global cannabis company that exceeds the sum of its parts. BY TOM HYMES
D
ENVER-BASED INCREDIBLES sells a lot more products than just the Mile High Mint chocolate bar. Under parent Medically Correct LLC, product lines include gummies, mints, and tarts bearing the incredibles brand; cartridges, concentrates, and pens bearing the incredible Extracts brand; tinctures, bath salts, and CBD pens bearing the new incredible Wellness brand; and the incredible Extractor, a full-profile, closed-loop hydrocarbon cannabis-oil extraction system developed in-house by the incredibles team. And those are just a few. Still, after eight successful years, with domestic and international expansion always in progress, the company proudly points to its original Mile High bar as one of its perpetual topsellers. incredibles’s line of infused chocolate bars includes many other notable flavors, of course, including “chronic bestseller” Affogato and award-winning Black Cherry CBD, but executives are unsurprised by the popularity of the original recipe. They say the product has earned its devoted following thanks to the company’s original commitment to providing quality medicine, accurately dosed every time. Being able to accomplish that also was no accident. Like so many inspiring stories in the cannabis space, incredibles/Medically Correct’s begins with the kernel of an original idea: What would happen if you brought the discipline of the food industry into the cannabis industry?
PHOTOGRAPHY BY THOMAS O’BRIEN
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| COVER | THE POWERS THAT BE Colorado-based cannabis companies still in operation are feeling their oats, and deservedly so. Surviving the rollout of a wholly new regulatory scheme is one of the most demanding and stressful experiences a business can endure. Add the copious restrictions placed on cannabis, and the chances of success plummet. So, those who make it through the gauntlet of regulation—a gauntlet that never ends, in fact— rightly feel empowered by the experience, eager to take what they’ve learned into new markets. That sense of opportunity is palpable among the four founders of incredibles—Chief Executive Officer Rick Scarpello, President Bob Eschino, Creative Director Derek Cumings, and National Executive Chef Josh Fink— even as their enthusiasm for the future is oh-so-slightly tempered by the reality that nothing stays the same for long in the cannabis fast lane. “No matter what the rules are now, they’re changing,” said Eschino. Among many other things, he manages lobbying and compliance for the company, which is currently in eight or so states and counting. “People get all up in arms about regulations, but I tell them not to get attached to anything. Compliance changes every three to six months, so it’s a moving target just to keep your business open.
“I have four people whose job it is to keep me out of jail, and that’s just in Colorado,” he half-joked. “Our national compliance guy has to know the rules for every other state because, as much as we want to believe our partners are doing the right thing, we double-check everything.” Eschino is about as far from a jailbird as one can get. A self-described “packaging guy” with years of experience in distribution and business development at scale, he’s singularly focused on building the best cannabis company in the world. He’s also moving into a new house with his fiancée, so he’s doubly determined to stay out of the slammer. So is co-founder Scarpello, the “bakery guy” and serial entrepreneur who created the first gluten-free recipe in 2002 and now essentially oversees operations for the multimillion-dollar, multi-faceted, and megaambitious Medically Correct operation. A large team and strict systems are in place, of course, but Scarpello is unabashed about the possessive nature of his relationship with incredibles. “Whenever I say ‘my’ or ‘my company,’ I mean ‘our,’” he explained. “Officially, Josh and Derek have sweat equity, Bob and I are invested in the company and own 80 percent of it, and there are other investors who have invested money. But I used to act like I owned things
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| COVER | twenty years ago when I didn’t, and that’s why owners liked me, because I acted like I owned the place.” Now he does own the place, but he wants everyone else to feel the way he used to feel. “If you’re running a department for me, run the department,” he said. “Make decisions as if you own the place. If you’re going to make me micromanage, you’re not going to last.” To that end, he lets his managers manage. “I will never do your job,” he insisted. “I will never hire someone and say, ‘Here’s your new employee.’ I might suggest someone who’s good, but you interview and hire them. If you don’t hire them, okay.” But someone always has a final say. “Bob and I are in charge,” clarified Scarpello, using Cumings to explain what he means. “Derek is the creative director and an owner, and when something is being created he doesn’t like, he speaks his mind strongly. But sometimes he doesn’t win those arguments, and he’ll ask, ‘Why don’t I win? I’m the creative director and an owner.’ In the end, it’s my decision and Bob’s.” Cumings and Fink are definitively “weed guys,” which partially explains their participation in the first place. From the start, Scarpello understood if you’re going to get into weed, you need people who understand weed, especially if you’re getting into weed and food. In 2010, Fink happened to be in the right place at the right time and met the criteria. He was working as an assistant pastry manager at Udi’s bakery in Denver, where Scarpello was director of bakery operations and plant director. “One day, Rick came up to me and said, ‘You know anything about that?’” said Fink, who was momentarily taken aback by his boss’s casual reference
“
Our advantage came from being food guys.
— Josh Fink, national executive chef
to cannabis. “I was like, ‘Why are you asking me that in this corporate environment?’” But the interest was sincere, and the challenge was real. “This was April of 2010, and by July you needed to have a separate cannabis kitchen,” explained Fink, who offered to come into Udi’s during off hours to create new artisan edibles products. “Rick was like, ‘No, we don’t do that.’” They found their own kitchen instead, and incredibles officially launched in June, one month ahead of deadline. Fink, a former dancer and musical theater performer who had trained to become a pastry chef, used alcohol extraction to make infused candy. “Our advantage came from being food guys,” he said. “I’d gone to culinary school and knew what emulsion meant. If it’s a food oil, I’ve tried to infuse it. “I’m a chemistry nerd,” he added, “but I never equated butane with safe cannabis extraction. I had no clue.” Butane extraction was introduced to incredibles a few years later by Cumings during a fortuitous meeting arranged by industry veteran Adam Dunn. Cumings, whose severe injuries at a young age left him at the mercy of prescribed narcotics, later discovered the gentle embrace of cannabis-based therapies and became a self-taught master of BHO extraction and an experienced producer of quality edibles. Following the unfortunate end to his dream of opening a vertically integrated dispensary in his Colorado hometown, Cumings found himself at a meeting with Scarpello and Eschino.
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“I go to a consulting gig to talk to Rick and Bob about a grow, and I’m looking around and listening to Rick tell his story about Udi’s Bakery, and I’m thinking, ‘Man, you guys are just fucking dumb. You’re making the wrong product,’” he said. “They had this caramel corn Josh said was a bad batch, but I’m eating this popcorn and it’s just not very good. On the other hand, I also ate their brownie and it was the best weed brownie I’ve ever had. But I’m thinking, ‘How long will this last? Three days?’ And I’ve already been making my products for three years now, with testimonials and proof.’” Cumings said that’s when it occurred to him something unique was staring him in the face. “I’m supposed to be there talking about the grow, but I’m thinking, ‘Man, these guys understand scaling a recipe, sourcing ingredients, homogeneity, all the things I had struggled with being a small-timer trying to make candy bars for four or five stores. They were good businessmen. Bob was into packaging. Udi’s was the biggest name in Colorado. And I’m saying to myself, ‘Man, I’m just going to tell these guys what to do and see how it works out.’” Cumings suggested they meet again the following week. “That gave me time to get some chocolate bars that I had made eighteen months before,” he said. “They’d been sitting since I had closed the [dispensary], and I remember dusting them off and thinking this is going to be easy with the Mile High bar. “Rick and Bob were there,” he recalled. “I said, ‘What you guys need to do is fuck the brownies and the caramel corn. Now, try this.’ They ate the chocolate,
and were, like, ‘This is amazing. What is it?’ “It’s just a candy bar,’ I told them. ‘The thing is, it was made over a year ago.’ They wanted to buy the recipes, but I was like, ‘Nah, it’s bigger than that. I’m about to change your everything. Let’s figure it out.’” The opportunity was obvious to everyone. “Derek saw right away who we were and realized we were the people who could do what he wanted to do,” said Eschino. “He’d been making tinctures and oils for himself and came into our lives at the right time. He brought shelf stability and the chocolate recipes. But the first thing he said was, ‘You guys have to get a closed-loop system.’ A what? This was eight to nine years ago, and we had no idea what that was. So, we got a small system that nearly bankrupted the company: It was $4,000.” It also was the beginning of a process that led to the creation of the incredible Extractor, of which about a hundred have been sold, the incredible Extracts line, which launched in 2014, and pretty much everything else the company manufactures.
MAKING INCREDIBLES’S EDIBLES CREDIBLY INCREDIBLE “When Derek started us down the path to hydrocarbon extraction, that’s when we really started understanding who, what, and why,” said Eschino. “Hydrocarbon extraction is a proven technology that, once we perfected it for our facility, allowed us to do anything. It is the medium that allows us to make anything correctly and accurately.”
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| COVER | Colorado currently has slightly more than 500 cannabis dispensaries to serve a population of about 3 million people. To meet demand, incredibles produces 5,000 to 7,000 pieces of chocolate a day. “Or we can do about fourteen cooks of gummies a day and get about 4,000 pieces out of each cook,” said Fink. “So, that’s thousands of pieces a day.” The company could increase production to meet increased demand, he added. Dedicated to employing sustainable practices, the company takes great pride in its sourcing of both cannabis and chocolate. “We have a supplier out of Chicago who supplies all our chocolate,” said Scarpello. “There is one guy who owns 60 percent of the chocolate in the world, and we’re under that branch. We have a very particular chocolate that we use. It has a recipe that is internal and a part of our [intellectual property]. “When it comes to cannabis, I grow my own in Colorado, so that’s a part of our internal business,” he continued. “When I go to Las Vegas, I have a partner there. He grows his own and he has his own supply chain, but I can pull my license from any deal if Josh or I look at it and say the quality isn’t there.” Consistency also is an important component of quality. “I have internal controls that keep my medicine within 10 percent,” said Scarpello. “Ninety percent is my cap of variance, meaning if I say it’s 100mg, it will be between 91mg and 109mg. The government of Colorado currently says it should be 15 percent, but we were able to maintain our level of consistency from day one.” One could look at that level of consistency as a building block for incredibles and a direct result of
“
You have to be nimble and you can’t be attached to anything, because everything changes. — Bob Eschino, president
the owners’ background in food. “We know how to make things homogeneous,” said Scarpello. “It was 100-percent rare [in this industry]. Nobody did it and nobody dictated it until four years later when the state went [recreational use], which changed everything and got the attention of everyone.” Scarpello’s intense and tall, mind and body always in motion, thinking ahead, planning for the unexpected, exactly how he seems to like it. “Bob and I built the car on the highway. That’s who we are,” he explained. “One of my partners once said to me, “Why do you run this company with a shotgun approach?’ We’re not going by the book because there is no book. We’re writing it, so sometimes we take a left turn and sometimes a right turn. When you shoot with a rifle it’s more precise than with a shotgun.” That sounds a little intimidating, and competitors should take note, but Scarpello is a man of faith tasked with keeping the car on the road and making sure everyone gets home to their family or wherever else they’re going. He’s just another proud cannabis-loving American from the right side of the political spectrum. “I’m a conservative Christian, the guy going to church, so I must hate marijuana, right?” he said. “Not me, because I realize this is a gift from God when you use it properly. Genesis 1:11 says every food-bearing seed, every plant was from God and that it was good, so if you believe in the Bible it was good. It wasn’t Satan’s thing.”
B
THE MAKING OF INCREDIBLE WELLNESS The newest line for the company is incredible Wellness, which features an opening salvo of “holistic medicinal cannabis” products that include eucalyptus- and lavender-scented bath salts, tinctures and vapes, and suppositories, each of which is available in regular- or high-CBD versions for both the medical and recreational markets. The Wellness line’s design is more medicinallooking than the company’s other lines and would not be out of place in a drug store or doctor’s office. “In Colorado, the Wellness line can only be sold in dispensaries, but yes, it is appropriate for doctors’ offices and clinics,” said Eschino. In Colorado, the same kitchen can make products for both the medicinal and adut-use markets only if it has licenses for each. CBD-only products must be made in another location, however. “We’ve got another kitchen in Colorado that makes CBD products, edibles, and tinctures, and those products are at chiropractors’ offices and head shops,” added Eschino. “We’re talking to doctors’ offices, but they really can’t do it and most of them don’t. We don’t want to sell online, and we don’t want to ship out of state, so everything is sourced and sold locally in Colorado.”
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| COVER |
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Eschino and his co-owners believe the Wellness line will be a large part of the company’s future. Upcoming products include Wellness tablets, pain sticks, lotions, bath fizz, mouth spray, and a topical patch. In truth, however, the line is neither a new idea nor a new project for incredibles, but something that has been in development from the beginning. “The Wellness line is Derek’s baby,” said Eschino. “He uses those products to save his own life.” And other people’s lives, according to Cumings. “It’s new, but the [Wellness] line has some of longest product testing of any because I was making salves and creams, bath balms, and sugar-free products for my first patients,” he said. “I was the first one using topically fifteen years ago.” The sense of being first permeates the company’s ethos. “Some of those nuances that we have known about from the beginning have been a sharp learning curve for other people,” Cumings said. That goes not only for their production processes, but also for the way they look at everything. “Within the industry, we’ve put together coalitions that include us, Wana Brands, Dixie Elixirs, Edipure, and Cheba Chews, all in one room,” said Scarpello. “We were the ones that came up with the idea that you should not have edibles in Colorado that look like a person, animal, or fruit. We were leading the charge. We labeled and marked each portion three years before it was required.”
‘WE’RE NOT DOING THIS FOR THE MONEY’ It takes a special breed of person to run a multimilliondollar company that hangs by a thread, and a special dedication to continue abiding by exacting standards
when cutting a few corners might make things easier. But the incredibles team never considers cutting corners, even when they feel as though the world is aligned against them. “Not only do you have to maintain your quality, but you also have to be compliant,” said Eschino. “You have to do this just this way, or they are going to come in and shut you down. If you don’t know the rule, they don’t care. They come in and you get fined or shut down because you didn’t follow the rules.” The solution is to “keep your blinders on, because every week someone is coming out of the shadows to try to destroy your business,” continued Eschino. “Whether from the federal, state, or local level, we are constantly being attacked from all sides. You have to be nimble and you can’t be attached to anything, because from the product mix to the way you extract to the way you package and market, everything changes. “It’s all about responsibility not only to your company, but also to the industry and the patients you’re helping,” he added. “That’s why we know we’re on the right path and doing the right thing. We stay focused on making the right product and moving forward. If shit falls apart, it falls apart. There is so much out of our control.” Some of the regulations are so absurd Scarpello leaves the legislative lobbying to Eschino, lest he express his honest opinion to the wrong politician. “I tried, but when I get in a room with a politician, I go, ‘What the heck are you doing?’” he said. “For example, when in this country did we discover how to grow a product and then consume it through our mouth safely?” he asked rhetorically. “One hundred and five years ago. It was called the [Food
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and Drug Administration]. We know how to grow broccoli and carrots and lettuce and put bug spray on them so it doesn’t kill us. Okay, you can argue about that until you’re blue in the face, but for the most part we’ve made a good supply chain that’s safe. So, why are you now telling me what to put on my cannabis that’s different from the broccoli—different set of rules even though I’m putting it in an edible and consuming it? We figured that out years ago, but now you’re making up a whole new set of rules about how I can spray my cannabis.” A similar line of reasoning extends to cannabis regulations for BHO extraction. “Most people don’t know this because they don’t come from the food world, but there are companies in America that make systems as large as two cars stacked on top of one another that do butane—really hexane, a hydrocarbon extraction—and you consume it every day when you go to a restaurant,” he said. “When people talk to you about butane being toxic or unsafe, they’re lying to you. You suck in 183 milligrams of butane through your nose every day as you walk the earth. You can’t stop it; it’s in the air. Let me equate that to you: It’s like doing ninety dabs of just a normal hit of shatter.” In short, the incredibles team is nothing if not confident about their processes and their capabilities.
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“Where we’ve excelled, where we’ve been able to stay ahead—a giant leap ahead—is that we’ve been multifaceted from the beginning, and nobody knew it,” explained Cumings. “We’ve been in charge of the process for so long.” Cumings speaks of his own abilities with a confidence that somehow doesn’t sound arrogant. Admitting that “there are better ways to do a lot of the stuff I’ve done,” he added matter-of-factly, “It’s dangerous ground to question my ability to come up with something. I’ve faced so many of these guys that come from a science background who think they’re going to come into weed and take over. Well, you’re sadly mistaken. You know what you didn’t learn about in school? Weed. You should have learned about it at a young age just because of the benefit the hemp plant has given from the beginning. “In the real world,” he added, “discoveries happen before the understanding of why. I’m not constrained by what I learned in school, or it will kill me.”
BUILDING ‘THE COCA-COLA OF CANNABIS’ MC Brands, the corporate entity that owns all intellectual property for Medically Correct, is about to announce a deal with a large Canadian company, but the details were still secret when this article went
4/7/18 11:00 AM
| COVER | to press. Still, Scarpello barely could contain his excitement about the future of his company. “We say it all the time: We want to be Coca-Cola,” he said. “And I know a whole bunch of companies say that. Well, someone’s going to be the Coca-Cola of cannabis, and someone’s going to be the Pepsi, and the RC Cola. Those are great brands, too, and they do millions [of dollars in revenue], but only one company will be CocaCola. It’s been our goal from the beginning, which is why we are getting back to our roots and expanding our brand with incredible Wellness.” Those ambitions dovetail perfectly with Scarpello’s determination to initiate a sea change within the industry. “I’m speaking in New York, Boston, and Los Angeles this year,” he said. “A part of it is about marketing the company, but it’s really about educating the world. I’ll be speaking to cannabis audiences about food and these other things I’m talking about, like controls. “I want to bring the professionalism of the food industry to the cannabis industry, and it’s not happening as fast as it could,” he continued. “I’m one of the voices out there saying, ‘I know how to do this right. I am the F and the D in the FDA, the food and the drug, because I’m making the edibles.” To realize these goals, the company is structured to accommodate domestic and international partnerships. Medically Correct LLC owns the licenses in Colorado and is the main breadwinner, according to Scarpello. MC Brands owns all intellectual property and handles licensing, including to Medically Correct. “Medically Correct owns Colorado and MC Brands is everywhere else,” Scarpello explained. “So, Medically Correct owns incredible Wellness in Colorado, making money, but if I take Wellness outside Colorado, MC Brands owns the name. If [Medically Correct] takes [Wellness] to Oregon or Illinois, they pay MC Brands, which then funnels [the money] back. “Think of the partnerships as a McDonald’s or Subway franchise,” he added. “They’re like franchises, but they’re called license agreements.” Coordination makes the myriad parts work. To that end, the company has built its own scalable software system. “We couldn’t find anything off the shelf that did what we needed,” said Scarpello. “There’s QuickBooks for accounting and Salesforce for sales, so we created both in one. It’s been in beta for six years. All our sales reps can go around the country with their iPads, have access to their own modules, and see everything they need to see.” It’s not currently for sale or license, but Scarpello didn’t rule out the future possibility. “I did separate it in case I want to go there,” he said. “If you want to invest in it, we’ll make it a company.”
“
I feel like we’re at the start of a race, and the best guys have a head start, but everyone else is coming. — Derek Cumings, creative director
Meanwhile, everyone is laser-focused on their tasks and goals. Fink oversees teams that travel the country working with a vast network of kitchens to ensure their sourcing and product output meets company standards. “It takes an army. I can’t do it all alone,” he said. “People tell me I do everything, but I joke that I just make coffee and drive up and down the road. Our main two facilities are a mile apart.” Cumings is doing what he has always done, but with better tools. “Now I use analytical data and more scientific methods, but I’m still Patient Zero,” he said. Much of his time goes into research and development and finalizing recipes. Micro-dosed products, which are already in production, hold particular promise. An artist, he also oversaw the redesign of the company’s new packaging. “I want to make the cool brand that is successful for Bob and Rick. I feel like we’re at the start of a race, and the best guys have a head start, but everyone else is coming. We’re a known leader and get to start at the front of the marathon, but if we trip or have to stop to tie our shoes, these guys who don’t know anything will run right past us.” Eschino is busy opening new markets and working with regulators on raising national standards. He understands the imperative to expand the company and has had to change the way he approaches potential partners because of it. “I spent a lot of time finding the right people to work with, and some are still waiting for their licenses,” he said. “We helped with their applications and they got them in, but often they’re still under construction or they don’t have enough capital, and the process can take years. Now I’ve changed my focus to, ‘Are you in operation, and if not, what is the time-frame?”
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There are other equally important considerations. “If you’re only about making money, you’re not my partner,” said Scarpello. “Do we need to make a profit? Yes, because I want to be in existence tomorrow. I want to pay my rent and my employees. But if you’re about money you’re not my partner, because that means you’re looking to screw me. You’re looking to take money from me. You better be about the patient, about quality, about the long picture. You better be about marriage. If I have a partner in each state and it’s like a marriage, and they need me as much as I need them, it’s great.” Scarpello has been married for more than twenty years and understands the effort that goes into making a marriage work, which is maybe not that different from living a principled life. “You need to figure out how to sleep at night, and one way is to not screw people over,” he said. “If your intention is not to just make money, you’ll be able to sleep better at night. If you live your life with other people being important to you, giving instead of taking, you’ll sleep better.” It’s why he never loses sleep over work, about which his intentions are manifestly clear. “I want to expand this industry with customers and patients foremost in mind,” he said. “I want to become Coca-Cola, but I want to do it organically through the patient, through
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“
I want to become Coca-Cola, but I want to do it organically through the patient, through the customer. — Rick Scarpello, CEO
the customer. To me, it’s about them. I have ninetyyear-old patients and four-year-old patients taking our medicine. If we can help these people and everyone in between and make them fans, I’ve done my job. I’m doing the right thing, and that’s how you sell products, I think.”
4/4/18 11:16 AM
| FEATURE |
Branding and Marketing:
Three Experts Weigh In BY Leah Maurer
W
E INTERACT WITH BRANDING and marketing on a daily, often hourly, basis. Some concepts are well-formed and enduring—Budweiser’s Clydesdale mascots, Nike’s aspirational vibe embodied in an iconic swoosh, KFC’s southern-comfortfood vibe. Others are ill-conceived, forgettable, or downright offensive. Branding and marketing notions are still taking shape in the emerging cannabis industry. The process is important not only for the companies trying to establish a firm impression in consumers’ minds, but also for the industry as a whole while it attempts to remodel public perception and change the political tide.
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| FEATURE |
Drake Sutton-Shearer (center) with Kieve Huffman (left) and Josh Otten (right), PRØHBTD
THE IMPORTANCE OF BRANDING Now is a critical point for cannabis companies to focus on building strong brands. The industry is experiencing tremendous growth, and the brands that win will be the ones that tell their story in an engaging, memorable, creative, and authentic way. “What worked in the past simply won’t work as the market expands at an unprecedented pace,” said Jared Mirsky, founder and chief executive officer for fullservice branding and marketing firm Wick & Mortar. “Consumers purchasing recreational marijuana today don’t care about advanced grow processes or innovative production lines, so relying on those features to sell your product won’t generate consumer loyalty. Today’s recreational cannabis users are casual, inquisitive, and open-minded. They purchase cannabis
for an experience, and that experience starts when they discover a brand that makes them feel something before they even open the package.” Drake Sutton-Shearer, founder and CEO of culture-oriented media platform PRØHBTD, pointed out successful brands typically share three components no matter who they are or what they sell: essence (heart and soul), loyalty (a customer following), and credibility (features people need). “With more than 60,000 companies in the cannabis industry and more than 200 million consumers now living in a post-prohibition economy, the opportunity to create and market brands with those three components is incredibly exciting,” he said. “The challenge for the endemic industry entrepreneurs is how to build on their existing foundations and cross over to the mainstream
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| FEATURE |
“
LOOKING TO CANNABIS’S FUTURE, I hope to see more teams combining the “old guard” with the “new guard.” Participants who built the industry over the past ten to twenty years inject significant domain expertise, preserve the industry’s culture, and carry the oral history of the plant. Similarly, newcomers infuse the industry with new skill sets in finance, marketing, retail, information technology, human resources, sales, and other disciplines that are prerequisites to scale. Not only do I hope to see more and more of these combinations, but I also believe the most successful cannabis companies will harmonize these disparate backgrounds into an improved culture, keeping the best of the old and injecting the best of the new. —Adrian Sedlin, CEO, Canndescent
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| FEATURE | for a larger share of market and wallet. The challenge for non-cannabis entrepreneurs or companies entering the market is finding the right partners who understand the cannabis consumers and supply chain.” Branding and marketing, when done correctly, can move a product or company to the next level of business and, in cannabis’s case, stands to help move the entire industry up a level in the public eye. But as an industry grows, so do consumers’ expectations. Zack Darling is CEO (“chief eternal optimist”) for The Hybrid Creative, a full-service design, web, and branding firm. According to him, characteristics that once identified powerful brands, such as “high quality” and “consistent,” have become minimum standards. “It’s important that every cannabis brand take a step back and realize that they’re not running the show anymore—the consumers are,” he said. “I’m a firm believer that people don’t buy what you do. They buy why you do it. A self-educated consumer looks deep beyond the product itself. They resonate with the compelling story you tell and embrace it as their own.
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Working backwards from the target customer psychographic and creating buyer personas should be the first step in any brand-creation journey, even before deciding which product to produce. — Drake Sutton-Shearer, founder and CEO, PRØHBTD
Purpose-driven brands create change in the world, and people love being a part of that change. Purpose-driven brands don’t just have customers; they have die-hard fans that propel the brand to their communities.”
THE BIGGEST MISTAKES
PRØHBTD: Pot Pie with Chris Sayegh “The Herbal Chef ”
PRØHBTD: Modern Grower hosted by Felix Fang
As cannabis legalization continues to roll out across the U.S. and around the world, companies whose primary focus has been to grow and sell cannabis increasingly face the need to expand their product lines. Consequently, they must brand new product(s) in their current markets and for the mainstream pubic. This presents several challenges, and there has been no shortage of mistakes. Experts agree that putting consumers first is key. Failure to view branding and marketing from a consumer perspective is the mistake they see most often. “I don’t really understand why so many companies are in such a rush to design and package up a product without first understanding more about who they want to sell it to,” Sutton-Shearer said. “I see a lot of people wasting time and money on things that really won’t matter down the road and really don’t fit into a larger vision and plan. Working backwards from the target customer psychographic and creating buyer personas should be the first step in any brand-creation journey, even before deciding which product to produce.”
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| FEATURE |
“
THE MOST IMPORTANT STRATEGY for growing your social media presence is having a consistent theme or mission. The content has to feel genuine. With authenticity, the audience you attract will be organic and loyal. I’m still shocked every day by the amazing community that has built around me. Whenever I can, I try to respond individually to followers who reach out, because engaging with your audience plays such a big role. Through their comments and feedback, they let you know what they want to see, and you can use that intel to help you create new content. My followers are from all over the world, and it’s inspiring to see all the pictures and videos of the ways people smoke in Russia, Chile, Brazil, Canada, etc. But that also shows me I need to make sure a diverse audience is able to relate to my videos. Don’t overlook the power of being yourself. Instead of chasing a trend, just be you. — @koala.puffs, social media influener
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| FEATURE |
Zack Darling, The Hybrid Creative
Mirsky, who has been in the cannabis industry for almost a decade, agrees. “When it comes to recreational marijuana, the difference between success and failure is how appealing your brand is to your end-user,” he said. “Consumers need simplicity and clear communication about the things they care about.” He also mentioned lack of brand strategy at launch and failure to go beyond old cannabis clichés (such as “green,” “canna-,” and “high”) can be counterproductive. “A bright-green marijuana leaf logo or a clever ‘bud’ pun isn’t going to help you stand out and, in fact, it may contribute to the stigma we’re fighting against as cannabis becomes more mainstream,” he said. “We are shaping the face of the industry, and we have an opportunity to combat [cannabis’s] perception as an illicit, back-alley product. Thoughtful, strategic branding can legitimize cannabis
as an adult substance to be enjoyed and savored the way one enjoys fine wine or craft beer.” Darling recommends using a method he calls “be, do, say” in order to remain authentic and avoid common pitfalls. “Be the authentic brand you know you can be. Embrace your idealistic self and set the standards you believe in,” he said. “Then, do the things necessary to ensure you’re truly walking your talk. Set new guidelines with your employees so everyone feels safe and respected. Reduce that carbon footprint. Raise the quality of your product. Go get that certification of high farming standards. Donate to good causes. All of this will deeply grow the value of your company and the pride you take in it. Then, and only then, do you say. Tell the world about how high-integrity your brand is. Pull out the fancy words and graphics. Stand on the
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Photographs of products demonstrate more than just the elements that are being sold, but also the brand experience. All elements of the photo should enhance the product and the brand, rather than distract. Erik Hecht has mastered the art of creating visual stories for some of the world’s top cannabis brands. His company, Medicinal Light & Magic (@weedlightmagic) @weedlightmagic) places an @weedlightmagic emphasis on the personal experience and elevates the brand’s image by presenting a warm and clean aesthetic.
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| FEATURE |
“
Even our phones have cameras nowadays. Photography, as a medium, is ubiquitous. But photography as an art speaks to you. And speaks for you, at best telling a story about you. And that is the essence of branding.
—Thomas O’Brien, photographer
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| FEATURE | mountaintop and profess to the world how awesome your brand truly is. When you have your ‘be, do, say’ in order, your brand is ironclad and bulletproof.”
TIPS FOR SUCCESS So, how can companies become prosperous and see return on their branding and marketing investment? Within an emerging and ever-changing industry the scope of the work may vary, but consistency and employing timeless methods can help ensure success. “As additional states legalize and the marketplace becomes more crowded, it’s the brands with generic, descriptive names—like “canna,” “green,” “emerald,” etc.—that will find themselves in legal conflict and be challenged to protect themselves,” Darling said. He advises avoiding generic names, knowing your brand narrative well, and branding both internally and externally. “Your target audience is a very smart group of people,” he said. “If you’re building and marketing a brand that is anything less than 100-percent authentic, you’re in the wrong place and you run the risk of failing to build customer retention and loyalty.” Mirsky agrees, adding that knowing your target consumer is imperative. “For example, a key insight on my mind recently is that consumers in our industry prefer socially responsible brands,” he said. “As a result, sustainable packaging has natural appeal for the average cannabis consumer. When I work with clients, we use consumer insights like these to create brands that consumers love because they tap into the things they care about.” He also suggested businesses work with experts whenever possible and be willing to refine their brands—for both business-to-consumer and businessto-business relationships. “It’s just as important to
“
People don’t buy what you do. They buy why you do it. —Zack Darling, CEO, The Hybrid Creative
Hybrid Creative client High Country
Wick & Mortar project: Elevate
educate potential [business] clients about what sets you apart from your competition and to speak to them in their language,” he said. Sutton-Shearer said knowing your consumer and educating others about your company, products, and services are critical. “Don’t focus on logos,” he advised. “Focus on the customer and understand who they are and what they’re willing to buy. Then you’ll be able to design a brand, a pricing model, and a product experience that will fit into their lifestyle, whatever that may be.” He encouraged business owners to produce content that informs and entertains and easily can be found in places where the target customer goes—online and offline. Companies shouldn’t expect overnight success if they’re creating a luxury brand. “People who will be able to afford your brand don’t likely have a retail experience to actually make that purchase just yet, with some exceptions,” he said. “Build desire, create scarcity, and your customers will seek you out, but just make sure you have enough funds to wait it out at the same time.”
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| FEATURE |
Jared Mirsky, Wick & Mortar
“
Today’s recreational cannabis users are casual, inquisitive, and open-minded. They purchase cannabis for an experience, and that experience starts when they discover a brand that makes them feel something before they even open the package. —Jared Mirsky, founder and CEO, Wick & Mortar
BRANDING UP, BRANDING OUT The way cannabis companies brand and market themselves and their products not only directly affects how consumers perceive their brand, but also how society at large perceives the entire cannabis industry. Branding to mainstream society already is playing a pivotal role in changing the hearts and minds that need to be changed in order to make cannabis—medicinal
and recreational—as accessible as aspirin and beer. By understanding the importance of branding, knowing potential setbacks, and having industry experts provide guidance, cannabis businesses have the chance not only to create success for themselves, but also to move forward the goal of full legalization for a beneficial herb unjustly stigmatized for too long.
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| LEGAL |
Branding a Cannabis Strain: Don’t Reinvent the Wheel
B
BY Nicole Syzdek and Mary Shapiro, Evoke Law PC
EFORE YOU NAME A STRAIN, you need to know the strain name and the brand name are not the same. A brand name or trademark does not communicate “what” the product is, but rather “who” is providing it, meaning a trademark doesn’t tell you about a product but instead communicates the source or origin. When selecting a trademark, always aim to choose a term or phrase that is both distinctive and exclusive, staying away from names that are descriptive, deceptively misdescriptive, or confusingly similar to state or federally registered marks, an applied-for mark, and common-law (unregistered) marks that are used for related goods or services, as well as famous trademarks, which enjoy an even broader scope of protection. If you select a trademark that is also the name of a strain used in your products, the selected mark would be considered merely descriptive of the product and not protectable for such cannabis products. For example, if an edible product named “Blue Dream” incorporates the Blue Dream strain, the manufacturer would not be able to protect the product name because it is merely descriptive of a product feature. Alternatively, if your cannabis product shares a name with a strain but the product does not contain that strain, the selected mark may
be found deceptively misdescriptive if consumers would assume (albeit incorrectly) your product contains the particular strain. Marks comprising strain names such as OG Kush, Hardcore OG, and Charlotte’s Web are examples of popular strains the United States Patent and Trademark Office has found potentially descriptive or deceptively misdescriptive. Unique to branding cannabis products, you also will want to stay away from choosing a brand name or advertising your product if it contains a strain with a name that may be considered attractive to children. Many state laws, including those in California, Maryland, Minnesota, and Oregon, specifically prohibit cannabis products and product packaging from appealing to children. As the brand name typically is displayed most prominently on product packaging, these regulations necessarily prohibit names, images, and other language that may be child-friendly. A trademark is only one element of the branding process. Other elements, such as a distinctive logo on the plant pot and/or a hangtag or stake with additional information about the brand, also can create consumer brand recognition. Advertising impressions are important, and when there are dozens of choices for the consumer, a stand-out brand allows a consumer to easily distinguish one product from another.
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THE FIGHT TO ESTABLISH A LEGAL CANNABIS MARKET IN CALIFORNIA CONTINUES Marijuana may be legal in California but local city governments are continuing the war on drugs by implementing outright cannabis bans that are jeopardizing access for thousands of patients and the cannabis business operators who just want to make a living and help their communities. Almost 85% of the cities and counties in California have banned any form of cannabis retail. There are more licenses available in Denver than in every major city in California combined. Medical patients in vast portions of the state now have no legal access to their medicine. The voter demand for legalization is evident and these unlicensed operators need a realistic path to get licensed. We have fought for sensible cannabis legalization for a decade, and the cannabis community needs to stand up for the growers and small businesses who have served and employed their communities for years. Weedmaps is committed to doing its part to push for legalization, fairness, and freedom. We must call on local governments to uphold the will of their voters and push electeds to bring safe and legal cannabis to their cities. This is California’s opportunity to not lose its status as the global leader in cannabis. Although a lot of work remains to be done among lawmakers, regulators, and the industry, we are confident we can work together to create a functioning, comprehensive legal market across the state. It’s not just legalization we’re fighting for — it’s livelihoods, families, and opportunities. Now is the time to speak out so that small businesses and medical patients get a chance.
Visit weedmaps.com/openCA to learn more.
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| LEGAL |
With the improvement of strain genetics intended to deliver enhanced plant attributes such as high potency, high yield, and pest resistance, it can make sense to differentiate the product in the marketplace through branding. Positive brand recognition often makes the difference between a purchase and a failed sale. A successful sale can lead to consumer trust, and ultimately loyalty, resulting in repeat sales. But when it comes to branding strain names, there is no need to “recreate the wheel.” Agricultural and horticultural companies have used trademarks to identify the source of plant varieties and cultivars for decades. It is important to remember varietal or cultivar names are the designations given to cultivated varieties or subspecies of live plants or agricultural seeds and are the generic names for the specific type of agricultural product. Conversely, a brand name is a mechanism for communicating a company is the source of a particular product. One of the best practices to distinguish a “name” as brand name, not merely the identity of the cultivar or varietal, is to present the trademark as an adjective modifying a generic noun. For example, Floribunda (Latin for “many-flowering”) is a garden rose developed by crossing hybrid teas with polyantha roses to create roses that bloom with both the polyantha profusion and hybrid tea floral beauty and color range. When Jackson & Perkins, a company known for its cultivation of roses, went to market with Floribunda roses, a category of garden roses they developed, J&P branded their garden roses using distinctive and exclusive trademarks, such as Bolero™ Floribunda, Icecap™ Floribunda, Easy Going™ Floribunda, etc. The trademark tells you “who” the product comes from, whereas the noun identifies the common name of the product. In addition to coupling a mark with the generic name, it can be useful to distinguish a brand name from a varietal or cultivar name
by visually differentiating the “name” in ALL CAPS, italics, bold, or a different font, and pairing the mark with the appropriate notice symbol: ® for a federally registered mark and ™ for an unregistered mark. As with other varietal and cultivar names, a cannabis strain name does not signify a source, but rather generically identifies the specific type of cannabis. According to the Leafly® directory, the strain Blue Dream is a “sativa-dominant hybrid originating in California, [that] has achieved legendary status among West Coast strains.” But with hundreds of growers bringing Blue Dream flower to the market, who is known for growing the best Blue Dream? How do you distinguish your Blue Dream flower from a competitor’s? Though there are tricky nuances to branding a cannabis strain, it is far from impossible. For example, the Canadian cannabis company Tweed offers the strain CBD Kush under the brand name Devon™ CBD Kush. In this circumstance, the strain name, CBD Kush, is the generic cultivar name, and Devon is the unique, protectable brand name. As discussed, visually placing the brand name next to the cultivar name is proper trademark usage that can help solidify the source-identifying function of the brand in the minds of consumers. Understanding the difference between a strain name and a brand name at the outset is critical, as is using such names accordingly. Equally important is ensuring third-party strain directories such as Leafly, as well as dispensary retail menus, correctly identify and distinguish the brand versus strain names. In sum, branding a new (or old) strain in a way that associates your company as the source and makes it your own, requires at least the following: 1. For a newly developed strain, select a varietal name for the new strain and consistently use it as the “what,” e.g., Blue Dream. 2. For a newly developed or established strain, choose a distinctive and exclusive brand name as the source identifier and consistently use it with the strain name, the “who,” e.g., Marigold™ Tahoe OG. 3. Once you have selected a strain and a brand name, work with an experienced cannabis trademark attorney to assess whether the proposed names (brand and/or strain) are confusingly similar to an already registered mark, an applied-for mark, a common-law mark, or a famous mark. 4. Use and notice your trademark properly with the appropriate TM symbol for unregistered marks or the ® designation for registered marks, e.g., “Luminosity™ Blue Dream.” MARY SHAPIRO is the managing director of Evoke Law PC. She has extensive experience in trademark law and has been serving the cannabis industry since 2005. She is a founding board member of the National Cannabis Bar Association. NICOLE SYZDEK joined Evoke Law as an associate attorney in 2016 and enjoys writing about diverse legal topics relating to cannabis. Evoke Law is an intellectual property law firm located in San Francisco, providing a full range of services for cannabis businesses, including trademark protection and brand management, licensing, packaging/labeling compliance, trade secret protection, and Internet policies. For more information, visit Evoke.law or email iplaw@evoke.law.
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| FEATURE |
DO P E
D IVER SI T Y
Creating an inclusive environment for marginalized groups requires sensitivity and education.
BY Joanne Cachapero
T
he cannabis revolution is taking place in a time of turbulence. Coinciding with the pushback against decades-old U.S. marijuana prohibition, advocates from diverse groups across society have become agents of global change, challenging every aspect of the status quo on almost every level. States and voters see long-term possibilities for tax dollars in the multiple millions and increasingly support the legal cannabis industry. Newly created, rushing streams of revenue mean more than just money—they also create opportunity for previously marginalized groups to participate in a brand new, billion-dollar business as owners, entrepreneurs, employees, educators, professionals, patients, and consumers. As an industry, legal cannabis seems more inclusive than most, at first glance, but for some groups, it’s not that simple. Stigma and stereotypes still apply, including bias against “stoners.” Can the industry organically come together for the benefit of all participants? 92 092_103_Feature_Dope Diversity_mg33.indd 92
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| FEATURE |
Khadija Adams
African-Americans: a black-and-white experience
“
What if we had
positioned during
[alcohol] prohibition? What would that look like for us? Our communities?
”
—Khadijah Adams, vice president, C.E. Hutton
Khadijah Adams says it’s time for minority markets to get on board. Vice president of C. E. Hutton LLC and an African-American woman, Adams has been an entrepreneur since 1997. She started investing in the cannabis industry in 2014. After selling her company, MIPR Holdings, to C. E. Hutton, a Denver-based, minority-focused business development and management company, Adams focused on minority-owned companies in the space. C. E. Hutton’s definition of “minorities” encompasses all people of color, women, veterans and the LGBTQ community. “C. E. Hutton was founded to help minorities seeking entrance or expansion into these industries,” Adams said. “Our vision is to help level the playing field for minorities by offering business development and management services—which, in most cases, includes capital-raising support to help minorities get started and/or grow their businesses. “The train has already left the station and is headed for generational wealth for some who have already positioned in the industry and for many more who will position in the next few years,” she added. “The real upside is that the same verticals that exist in traditional industries are also found in the cannabis and hemp industries, so the opportunities are endless.” Adams also founded The GreenStreet Academy, an online educational program that teaches novice investors the fundamentals of investing in the cannabis industry. In addition, as a public speaker and business educator, she speaks to issues of diversity and the stigma attached to cannabis for communities of color. Much of the negativity associated with cannabis, in particular, can be laid at the doorstep of the federal government’s War on Drugs, which disproportionately affects low-income, ethnic, and marginalized communities. In January, voters in the City of Compton, home of iconic rap album “The Chronic,” overwhelmingly rejected a proposal for medical and recreational marijuana sales, citing the historic effects drugs have had on the community. Still struggling to advance human rights, involvement in any activities perceived as illicit may seem, to some community members, like self-sabotage. “There is a stigma, and unfortunately it was planted in our minds over eighty years ago,” Adams said. “Men and women of color being arrested and imprisoned
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| FEATURE |
Kathryn VanEaton
Knox Medical
“
Parent consumers
aren’t swayed by young influencers in small clothes, inflated claims
by brand-new
companies, or by watching stoners use cannabis
irresponsibly on YouTube.
”
—Kathryn Vaneaton, TheStonerMom.com
at alarming rates, more so than our white counterparts, have created this ‘stigma.’ Even during legalization, the arrests have declined for all racial groups, but that hasn’t halted racial disparities. Both black and white people are much less likely to be arrested over marijuana, but black people are still much more likely to be arrested for marijuana in comparison to our white counterparts.” Putting social stigma aside, Adams urged communities of color to take a different view. “When you turn that around 180 degrees to look at it from a different perspective, then one might consider the financial benefit of positioning in this industry as either business owners or investors,” she said. “The cannabis industry is here; it’s not going anywhere. If African-Americans don’t position in our own neighborhoods, then the dispensaries on our corners will not be owned by people from our community at all. “The industry is progressing much like that of the alcohol industry during prohibition, and although many fight to this day, alcohol will never become illegal again,” Adams continued. “Still, people own liquor stores in our communities who are not from our communities. What if we had established a presence during prohibition? What would that look like for us? Our communities? How many of us would have created generational wealth for our families or helped build a better and stronger community with some of the proceeds? I guess it’s all perception.”
Latinx: language barriers Spanish-speaking markets in the United States also feel stigma, according to Eliza Maroney, the Brazilian co-owner of cannabis subscription service Lucky Box Club. “I think it’s safe to say even some of my own family judges the fact that I work in this industry,” she said. “It’s no easy feat to come out of the ‘green closet.’ Unfortunately, most every Latin family has known someone who has either gone down a ‘bad path’ or has even been killed over cannabis. “Prohibition encourages illegal activity,” she added. “So, most traditional Hispanic moms, grandparents, aunts, and uncles think cannabis equals danger. They haven’t been told about the medicinal effects and most certainly have not been exposed to beautiful gardens filled with plant medicine. After bringing my own grandmother
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to my garden, she finally opened her mind to the possibility to this being something other than malo [bad].” With that in mind, Maroney said the Spanish-speaking market represents a major, mostly overlooked sector. Once outreach is made it’s a matter of education, and that starts with language. “Last year was our first year, and we spent so much time getting our rhetoric down just in English. Now that it’s a bit more refined and definite, it’s time to reach out to the Latin market and make them feel comfortable enough to ask the right questions to get the right medicine,” she said. “We are currently in the process of creating a Spanish and Portuguese—yes, Portuguese—info page and promotional material. I’m Brazilian, and I see my own community is cautiously curious about cannabis but understands nothing of the technical terms used in dispensaries and modern literature.” Recognizing the potential for profit in any market is not enough, though, according to Maroney. At Sacramento-based Lucky Box, the membership is diverse and includes older patients treating specific conditions including chronic pain, arthritis, fibromyalgia, cancer, and insomnia. Cannabis brings them an alternative to prescription medications, once they have education and access. Informational panels at cannabis events are a good way to start spreading the new message of mota [marijuana], Maroney said,. “Regarding sales, we certainly have our work cut out for us in order to reach the Spanish and Latin market,” she said. “But before
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we worry about the bottom line, I think it’s imperative that we reprogram our families; to break down the mental and emotional barriers that so many of them put up by integrating them into our educational events.” Cannabis’s healing effects benefit not only patients, but also whole communities. Florida-based Knox Medical’s reach stretches into two medical-only states, Florida and Texas, plus a newly opened dispensary in San Juan, Puerto Rico. “With operations in states that have large or predominantly Spanish-speaking populations, Knox Medical is focused on reaching all segments of our patient population where they are,” said spokesman Scott Klenet. “Much of our marketing materials and external communications are published in both English and Spanish. Many team members in customer-facing roles, from customer care representatives at our centralized call center to specialists working one-on-one in our seven dispensaries nationwide, are bilingual and have deep ties to the local Latinx community. “It’s too early for us to comment on market dynamics in Puerto Rico other than to say we’re seeing great demand for our products,” he continued. “To our knowledge, Knox Medical is the first mainland company to sell cannabis medications in Puerto Rico. We have invested in a state-of-the-art cultivation and processing facility in Barranquitas and opened the doors to our first dispensary in San Juan.
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| FEATURE |
Knox Medical’s San Juan, Puerto Rico, staff
“
I think it’s
imperative that we reprogram our
families, to break
down the mental and emotional barriers
that so many of them put up.
”
—Eliza Maroney, co-owner, Lucky Box Club
“First-month sales indicate there’s substantial demand on the island for highquality, medical-grade cannabis from a trusted national provider,” Klenet asserted. “Puerto Rican law also allows for visitors with active medical cannabis ID cards from their home state to purchase medications during their stay. Many of our customers on the mainland will find this option particularly welcome. Patients have already come away impressed with the professional care they received at our dispensary in San Juan.” In Texas, state regulation restricts the use of cannabis oil to patients with a specific form of intractable epilepsy. Because of their condition, those patients may also have cultural and geographical limitations. In a big state like Texas, Knox recently launched a delivery service with multiple distribution hubs in order to reach patientsin-need wherever they’re located.
Seniors: education in action With no plans to enter the recreational market, Knox’s line features cannabis products with medical applications, and those appeal to another group of patients: seniors, who are also a big market in Florida. With Baby Boomers continuing to move into the “elderly” age range for the next decade, the rebels of the 1960s and ’70s are revisiting their youth by “getting high.” “Our outreach efforts have focused more on general education. What is medical cannabis? Who is eligible under state law? How do you titrate and dose consistently and effectively? [Treatment protocol is more] than specifically marketing our products,” Klenet explained. Knox Health centers are set up like clinics where patients are treated by technicians and Knox-branded medicines are recommended. In an effort to reach senior patients, Knox also offers education for doctors and other healthcare workers. “Naturally, the authority patients trust most is often their personal physician, and as such we developed a robust physician outreach program,” Klenet said. “Doctors are routinely invited to Knox seminars and education events and are provided with the latest research and literature on dosing and titration scheduling. “Cannabis isn’t often covered in medical school, and we have found that these educational efforts go to great lengths in easing doctors’ concerns and helping them
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to better educate patients,” he added. Education is key, Klenet said, and it flows both directions. The company also learns from patients, and that’s led to new product development. “Many seniors are unfamiliar with medical cannabis and the modern administration methods we offer,” he said. “Currently, our products include vape cartridges, sublingual drops, creams, capsules, and suppositories, [all of ] which offer different dosing properties that patients and their physicians can evaluate—fast-acting versus sustained effect, ease of dosing, etc. Knox welcomes patient feedback that leads to new formulations and administration methods.” A recent local television news report profiled the senior-marketing strategy of Orange County, California, dispensary Bud and Bloom. The dispensary brings in seniors by the vanload for special events, seminars, and sales—not dissimilar to buses deployed by casinos and bingo halls.
American Indians: reservations are key Native American tribes in California haven’t jumped into the cannabis market in a big way yet, said Blue Quisquis, co-founder and chief executive director for the National Native American Cannabis Standards Association (NNACSA). A rebranding of the California Native American Cannabis Association, which launched in September 2017, the new trade organization’s mission is to establish standards and best practices nationwide, since current
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regulations vary state-to-state as well as by municipality. Quisquis believes reservations could be key in cutting through the red tape involved in establishing national guidelines and regulations, since Native American lands are largely exempt from federal law. “We had tribes coming to us that wanted to get medicine to their own people because they’re in remote locations,” Quisquis said. “So, they want to have access to cannabis for their own people and also start businesses, but we couldn’t tell them how to do it and be compliant. That’s what led us to go in this direction. For the industry to expand long term, standards and practices need to be established. “No one’s talking about things like counterfeit packaging, but there’s not [one system of ] best practices for packaging or labeling,” he continued, citing one example of regulation that needs to be recognized. “So, counterfeit packaging could be out there, because there is no set standard. No one’s talking about that.” Other issues that raise concerns for world-be entrepreneurs (and not only Native Americans) include illegal dispensaries and blackmarket sales, standardized labeling, accurate weights and measures, and testing standards for potency and contaminants, among a long laundry list of issues that require more scrutiny. NNACSA, Quisquis said, would like to host an event called The Roundtable, to bring together tribal representatives, state officials, investors, and cannabis industry members for discussion and development of industrial policies and guidelines. Tribal members, cannabis industry businesses, and business service vendors that
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| FEATURE | join NNACSA can take advantage of networking opportunities and other business benefits. Current organization sponsors include Cannabis Industry Practice, Tourmaline Enterprises, CBD Naturals, and Sapphire Solutions.
Mothers: responsibility matters
Buck Angel
“
The cannabis world needs many people to speak out for us to win, and we will win.
”
—Buck Angel, LGBTQ advocate and co-founder of Pride Wellness
No longer always differentiated by an X chromosome, women represent a sizable portion of the species that is made up of many diverse sub-groups, generational and gender identities, and other communities. There is no one way to market to them. Most women are extremely savvy consumers when they do spend their hard-earned cash, and these days it’s not just a matter of putting a pink ribbon on a product or having a Mother’s Day sale. While pot-smoking mothers compose a huge, often-overlooked market segment, cannabis-using parents is a topic rife with controversy. Some people with a traditional mindset presume getting high for medicinal or recreational reasons doesn’t jibe with responsibility. (Although drinking alcohol is just fine.) That’s why The Stoner Mom decided to make parenting and responsible cannabis use her niche. Colorado blogger Kathryn VanEaton hosts TheStonerMom.com, which helps parents make cannabis use part of their lifestyle as responsible adults. Visitors to the site find product reviews, podcasts, and House VanEaton, an online membership forum for parents who use cannabis. “Social media and online marketing are a powerful way to connect with other parents who are also cannabis enthusiasts,” VanEaton explained. “Cannabisconsuming parents are just like any other parents—they are incredibly busy, are not interested in ‘events’ that take them away from family on nights and weekends, and are responsible with their limited funds. “It’s important to note that today’s parents are tech- and media-savvy, and that social media marketing needs to be authentic and transparent to have a positive effect,” she continued. “Parent consumers aren’t swayed by young influencers in small clothes, inflated claims by brand-new companies, or by watching stoners use cannabis irresponsibly on YouTube. Testimonials from trusted sources are extremely influential in this space.” At House VanEaton, she said, members are serious about their recreational time since they may have very little. Many are medicating for conditions that include physical symptoms as well as anxiety and stress. Her insight into the market is laserfocused. Since VanEaton is a self-proclaimed cannabis-consuming soccer mom, she is her demographic. “Our members like to consume cannabis in all its forms, and they are interested in efficient tools that will help them do that,” she said. “They follow independent glass artists, are interested in exploring cannabis concentrates, and are well-versed in CBD. They aren’t afraid of high-dollar items like the Volcano vaporizer or highend glass, but they’re smart with their money and do a lot of research before taking the plunge. They’re interested in responsible storage and invest in locking stash cases and containers. They’re also interested in media personalities who clearly model responsible cannabis use and make them feel less alone as a cannabis-using adult.”
LGBTQ: authenticity counts Cannabis-using role models? Of course, some already exist in pop culture as cult figures, like Bob Marley, Willie Nelson, and Tommy Chong—all currently with their names attached to cannabis brands and all longtime advocates for alternative lifestyle philosophies. In the LGBTQ realm, transsexual man Buck Angel is an advocate, role model, and cult figure. Now, he’s launching Pride Wellness with business partner Leon Mostovoy. “We have not only THC products, but some of our big sellers are CBD products,”
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| FEATURE | Angel said. “My partner in PW, Leon, is also a transsexual man. He’s a very well-known and award-winning photographer. We’ve known each other for many years and both are sober, but [we] have used cannabis to help with anxiety and sleeplessness. We saw the future for wellness within our LGBTQ community.” For more than a decade, Angel has traveled globally as an LGBTQ advocate, speaker, adult film performer, and pioneering transsexual figure. He said when he saw patients benefiting from cannabis medicines and, as a sober individual, how much stigma remained attached to cannabis use, he had to get involved. “When I see something that isn’t being done and, especially when it also affects my life as well, then I want to be a part of creating [a solution],” he said. “I use cannabis as a medication. Many people will say then I’m not sober. Wrong—and that’s another reason why I’m very vocal about cannabis as medicine.” Angel is very candid about his past struggles with addiction. “My downfall was alcohol and drugs; my gender confusion also added to that,” he said. “Now that I am living my authentic self for more than twenty years and no more drugs and booze, which were my drugs of choice, I never feel like ‘using’ when I am medicating with cannabis. No desire [to use other drugs] at all. So how am I not sober? “So, cannabis is new, and many people already have this negative feeling about it. I disagree and have seen so much positive come from it,” Angel continued. “I know how advocating for something can make change. I proved that with my sex work. There was no one
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like me seventeen years ago in porn. Now there are many, and now we have expanded so many things in the transsexual community. It’s because of advocacy and speaking out. “The cannabis world needs many people to speak out for us to win,” he added, “and we will win.”
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| HORTICULTURE |
Greenhouses:
Top Five Questions Answered Christopher Machnich, GrowSpan Greenhouse Structures
W
ITH THE CANNABIS INDUSTRY in a constant state of flux, many growers find they have a lot more questions than answers. As more and more states legalize and distribute cultivation licenses, I’ve been lucky enough to follow closely and gain some insight by working with a team that daily fields questions about growing and establishing a sustainable grow operation. After talking to growers all over the country, it’s fascinating how similar the questions are. No matter the state in which they grow or the methods they use, all of their concerns fall along similar lines. Over recent weeks, our team of cannabis specialists has kept track of the questions they received, and here are the five they answered the most often.
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How can I get the lowest cost per gram?
Can multiple automated systems work together?
What growing method should I use?
It should come as no surprise that a question pertaining to profitability made the top five. While operations utilize a number of different growing methods, introducing automated growing systems is always a great first step toward lowering the cost per gram. For greenhouse growers, automated light deprivation is becoming the standard. An automated system lets growers completely cut out the labor that’s required to move and deploy blackout material. The systems run on a timer and provide precision photoperiod control, allowing growers to focus on other cultivation and business factors. Growers also have the option to utilize feedback-based systems that monitor the growing environment and then make the necessary environmental changes. Imagine a greenhouse that knows when artificial lighting should be turned on or off based on the amount of natural light the crops are getting or an irrigation system that constantly monitors moisture and knows exactly when to water crops. Feedbackbased systems are a great way to cut out waste and increase efficiency, saving operations money on a daily basis.
When using the right equipment and taking the time to set it up properly, wrangling numerous automated systems and making them work in harmony actually is pretty easy. Growers who embrace automation will benefit from a controller that allows them to manage and organize the functionality of all automated systems from one centralized location. These controllers can help operations maximize yield while minimizing labor. Almost every piece of equipment can be managed from a controller, and strategically placed sensors relay when to activate and deactivate separate systems and pieces of equipment. While controllers are on the forefront of growing technology, they also work well with a lot of the everyday tech devices on which we all depend. Growers can sync controller models to their smart phone or laptop, allowing them to manage their operation when offsite.
Everyone has their own opinion. The best method is the one that limits operating costs and still can be carried out by the head grower. With the incredible costs that come with running an indoor grow and the lack of environmental control in outdoor grows, we’ve always suggested greenhouse growing with an automated light-deprivation system. When using a greenhouse, growers can utilize natural light and gain complete environmental control, creating an optimal growing environment that has significantly lower operating costs compared to an indoor grow. Experienced growers who are willing to think outside the box also may wish to consider hydroponic production, which can provide superior control and allow operations to cut costs. A commercial-scale hydroponics system definitely can be a key tool in achieving an operation’s lowest cost per gram, but it takes an experienced grower to reap the benefits of hydroponic production. Those with little or no experience should start small and expand the system as they gain more confidence and experience.
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Left: This structure’s light deprivation system has been engineered to provide maximum ventilation.
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What should I look for in a greenhouse?
How easy is it to install a greenhouse?
Besides a supplier that is willing to work one-on-one to design a structure that meets an operation’s specific growing needs, growers should look for a greenhouse supplier that can provide stamped engineered drawings upon request. It’s unfortunate, but in today’s climate growers looking to set up an operation most likely will face some scrutiny from their local government. While other businesses may be able to get by using shortcuts, cannabis growers do not yet have that luxury. With this in mind, it’s important to know a greenhouse manufacturer’s wind or snow load rating is often meaningless in the realm of municipal building codes. What does matter to the municipality are stamped engineered drawings that prove a structure’s strength.
In order to save some money, growers often plan to install their greenhouse themselves. While installing a greenhouse in and of itself isn’t too hard to accomplish, cannabis growers often want features that make installation quite a bit more challenging. A perfect example of this is automated light-deprivation: Each engineered system is designed for and tailored to the greenhouse in which it will be used. This means there is no specific set of instructions for installing a complex system. In most instances, cannabis growers not only opt for professional installation, but also work only with companies that offer that service. Too many growers have tried to install their own cannabis structure only to fail, and that’s when they decide to bring in the professionals. In an industry where getting to market before the competition is important, starting over like that can break a business before it’s even begun to grow. This mistake has been made many times before, and the industry as a whole should learn from it.
Above: An automated light deprivation system in use. Background Image: This operation has dialed back its artificial lighting needs by using natural sunlight.
CHRISTOPHER MACHNICH is a digital marketing manager for GrowSpan Greenhouse Structures (GrowSpan.com). He is a cannabis industry enthusiast whose points of interest are greenhouse and hydroponic production as well as the cultural and economic impact of cannabis legislation.
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| MARKETPLACE INTELLIGENCE |
Customers Were Hungry for Edibles
During Q3-Q4 in California, Colorado, and Oregon. Provided by BDS Analytics
DID YOU KNOW?
ANALYSIS
There were 23.77 MILLION UNITS/PACKAGES sold at an average retail price of $15.38 PER PACKAGE making total sales $354.86 million. 250
247
$200M $191.3M
# of unique Brands
Total Dollars
200
$150M
Year-on-year growth in edible sales was impressive. Each state saw a spike in sales. OREGON saw an overall increase of 122 PERCENT while COLORADO saw an overall increase of 17 PERCENT. There was a significant spike in sales in December that reflects both a seasonal uptick as well as anticipated regulatory restrictions, product shortages, and inventory sell-off in California prior to the launch of adult-use sales.
177
150
$122.3M
100
CATEGORY TREND
$100M
Colorado and Oregon | Q3 and Q4 2017
$70m
100
$50M
50
$60m
$41.2M
0
$0 California
Oregon
Colorado
Tinctures Pills Other Edibles Infused Foods Culinary
$50m $40m
Chocolates
$30m
U.S. FEDERAL CANNABIS LEGALIZATION = 1.04 MILLION JOBS ( Job creation with Federal Cannabis Legalization) MANAGEMENT
RETAIL OPERATIONS
155,978
363,949
15%
ADMINISTRATION
228,768
22% 12% AGRICULTURE
124,782
$20m
Candy
$20m Beverages
$0 July
Aug
Sep
Oct
Sales Volume
$354.86m 23.77 million units/ Packages
CANAD TEC
Average Retail Price (Pre-Tax)
$15.38
Per Unit/Package
166,376
o
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O’C
H
Colorado and Oregon | Q3 and Q4 2017
Sales
MANUFACTURING
Dec
EDIBLES
35% 16%
Nov
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| MARKETPLACE INTELLIGENCE |
OREGON
COLORADO Colorado – Year over Year Growth in Edibles
OREGON– Year over Year Growth in Edibles $8m
2016
$25m
2017 + 22% Growth Year-over-Year
$6m
2016
2017
+ 17% Growth Year-over-Year
$20m $15m
$4m
$10m
$2m
$5m
$0 July
Aug
Sep
OctN
ov
Dec
$0
July
Aug
Sep
OctN
ov
Dec
BDS ANALYTICS aims to help the cannabis sector thrive by informing decisions with factual data. By capturing millions of transactions from dispensary point-of-sale systems, BDS provides actionable insights based on accurate information enabling dispensaries, brands, and growers to sustain their success. BDSANALYTICS.COM
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| PRODUCTS |
HARD GOODS PUFFCO PEAK SMART RIG The first smart rig on the market for load-yourown concentrates and extracts. Features an array of optimal temperatures, heats in just twenty seconds, and eliminates the need for torches and timers associated with traditional dab rigs. Pushbutton technology for ease of use. PUFFCO.COM
THE ORIGINAL BAMBOO ROLLING TIP Created as an all-natural alternative to glass tips and paper crutches, these tips are strong, light, reusable, and biodegradable. Employed as a rolling aid, they allow users to roll better and faster. Handcrafted in the U.S. Patent pending. BAMBOOROLLINGTIP.COM
HEMP PRESS CUSTOM CRUTCH CARDS Produced by Hemp Press, the cards are made of organic hemp that is lab-certified free of mold, mildew, and pesticides. Beeswax is locally sourced from untreated hives in the Willamette Valley. Customizable; in cards of three, six, or eight crutches, 250 or 500 per box. CRUTCH.CARDS
VAPRWEAR APPAREL AND GEAR Patented drawstring technology provides discreet, convenient access to vaping via an integrated vapor delivery system within apparel and gear. The integrated system houses a battery plus a medical-grade hose system with a vapor cartridge on one end and an extendable mouthpiece on the other. VAPRWEAR.COM
KUSHKARDS GREETING CARDS Colorful, clever, and unique greeting cards for the cannabis enthusiast. Different from everyday greeting cards, each KushKard provides a spot to insert a pre-rolled item of the giver’s choosing. A complimentary match striker is located on the bottom. KUSHKARDS.COM
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| PRODUCTS |
HORTICULTURE & GROWING CIRRUS 1K LED GROW LIGHT This new addition to the Cirrus line is its highest-yielding LED grow light to date. The Cirrus 1K utilizes full-spectrum, driverless chips-on-board paired with high-performance heat exchangers. Cutting-edge design allows for greater cooling, light output, and efficiency. CIRRUSLEDGROWLIGHTS.COM
BIOBLOOM An all-in-one bio fertilizer in powder form, for the flowering stage of plant growth. All essential nutrients, which are immediately available to plants, are provided by natural minerals and organic raw materials. Organic nutrients release slowly after being decomposed by microorganisms in the soil. GREENHOUSEFEEDING.COM.
CAL MAG MAXIMIZER A naturally organic product formulated for hydroponic and indoor soil gardening systems, Cal Mag provides calcium and magnesium supplementation for plants. Helps to increase vigor, builds strong cell walls, and produces lush, green leaves for larger yields. SUITELEAF.COM
BIO•GROW ORGANIC LIQUID FERTILIZER This liquid growth formula for most types of soil and substrates is based on 100-percent Dutch organic sugar beet extract, commonly known as vinasse. A combination of sugar starch, enzymes, and other plant nutrients produces a rich food source for soil microbes, meaning more productive soil. BIOBIZZ.COM
CLOUDPONICS GROBOX This self-contained technology solution for home growers includes a database of “grow recipes” that allow plants to thrive in ideal conditions. A mobile app enables monitoring and control from anywhere in the world. Task reminders help growers achieve optimal results. CLOUDPONICS.COM
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| PRODUCTS |
PSYCHOACTIVE NITROGEN-SEALED PRE-ROLLS Nitrogen-sealed using a vacuum process to remove oxygen and prevent oxidation, Grown Rogue’s pre-rolls are all fresh flower, no trim. Weighing in at a half-gram each, they’re great for sharing with friends. Two pre-rolls per glass tube with handy screw top for easy storage. GROWNROGUE.COM
PURE CANNABIS NECTAR AYA is a family of 100-percent sustainably produced and naturally concentrated cannabis nectars grown using just four ingredients—earth, water, sun, and sky—with no pesticides or chemicals. Crafted using a proprietary low-temperature extraction process; blended formulations are batch-tested to ensure quality. SONOMACANNABISCOMPANY.COM
PETRA MINTS KIVA’s microdose mints are a precise blend of California-grown cannabis and green tea matcha, making them helpful for clearing the senses.
Available in Moroccan Mint and Eucalyptus flavors. Both are sugar-free and contain the natural, plant-derived sweetener xylitol. 2.5mg THC per mint. KIVACONFECTIONS.COM
DIAMOND LINE CARTRIDGES Metal-tip cartridges with classy, minimalist graphics feature additional vents to allow increased airflow for a smooth draw. Styled for use with Eden Extracts batteries, they’re available in Sunset Sherbet, Thin Mint, SF Sourdough, and Gorilla Glue #4. Sourced exclusively from flower grown at Honeycomb Farms. EDENEXTRACTS.COM
PACHECOS Eco Firma Farms’ Pachecos are handcrafted, one gram, all-flower smokes. Available in four blended strengths: THC-rich Hammerhead, Stryder with balanced THC and CBD, low-CBD Mazzy, and high-CBD Keen. Packaged as singles and in packs of three and five. ECOFIRMAFARMS.COM
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| PRODUCTS |
NON PSYCHOACTIVE ALLEV-E-ACHE CBD PAIN CREAM Developed by PhD scientists, this advanced pain lotion penetrates the skin and acts fast to help alleviate minor aches and pains. The quickly absorbing topical seals in long-lasting, natural ingredients. Not tested on animals; gluten/GMO-free. Net Wt. 1.7 oz. (48 g). CANNAKIDS.ORG
NOT POT CHOCOLATES Concocted from industrial-hemp-derived CBD, Not Pot’s no-THC treats contain naturally occurring cannabinoids, antioxidants, and neuroprotectants to help consumers relax and unwind. Because the products contain no THC, they’re available nationwide. Ingredients include CBD-rich hemp oil, raw cacao, ashwagandha, and maple sugar. NOTPOT.COM
LUXE HYDRATING CLEANSING OIL Infused with sativa hemp seed oil and other botanicals, this gentle cleansing product helps retain skin’s pH balance while removing impurities without drying. The proprietary blend helps reduce skin inflammation, regulates sebum production in oily skin, and promotes a healthy epidermis. CANNASMACK.COM
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NANOSERUM Advanced nanotechnology penetrates the skin to deliver focused relief from pain, inflammation, and anxiety by delivering a full-spectrum of cannabinoids and phytochemicals to receptors throughout the body. Tested for purity and refined for quality; 100-percent free of contaminants, according to the manufacturer. EVOLVEFORMULAS.COM
PURCBD+ PHYTOCANNABINOID OIL FOR PETS Organic hemp oil sourced from Germany and the U.K. and organic hemp extract sourced from Oregon combine under cold-CO2 extraction to create a potent tincture. The product is 100-percent natural and independently quality-tested to ensure purity and effectiveness. Available in 125mg and 750mg concentrations. INNOVETPET.COM
Are you interested in having mg feature your product? Connect with us by emailing: editorial@cannmg.com
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| RECOMMENDER |
LANCE LAMBERT, STRATEGIC BUSINESS UNIT MANAGER FOR BOVEDA, RECOMMENDS… EDIBLES
FLOWER
I’ve always been a huge fan of Julie and team at Sweet Grass Kitchen (SweetGrassKitchen.com) in Colorado. Unlike most, they use cannabutter for infusing.
Hands down, for me, it’s Forte CBD from Palm Springs Safe Access (PSaccess.org). They found this rogue seed a few years back and have been selling out ever since. On the outdoor side, it would be last season’s Blue Zkittlez from Erin and her family at Hidden Prairie Farms (HiddenPrairieFarms.com).
TOPICAL I was turned on to Dr. Kerklaan’s product line last year (DrKerklaan. com). Being a cannabis user from a medical stance, his natural pain cream has been excellent for my knee and ankle.
VAPE PAX (PAXvapor.com) nailed it for me with the Era pen. I don’t leave home without it. Beyond being very user-friendly, it holds a charge forever, and PAX partners with some of the best manufacturers of oil, like Temple Extracts and Nativ.
CBD Any products from Billy and team at Pure Ratios (PureRatios.com).
DISPENSARY I have to give Washington some love on this one. Ganja Goddess (GanjaGoddessSeattle.com) in Seattle’s SoDo district is phenomenal. From the eclectic vibe of the shop to the friendly, professional staff and selection of products, everything is very much in sync.
BRAND This goes to Native Roots (NativeRootsDispensary.com) in Colorado. The marketing and brand continuity are on-point. Even more props for being able to keep the consistency with twenty-one shops under one umbrella.
BOVEDA is a global leader in two-way humidity control. From cure to consumption, Boveda protects, preserves, and optimizes moisture-sensitive products. BOVEDAINC.COM
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